SINGAPORE / RankWire.AI / – Oil prices edged higher on Tuesday following a decline of over 2% in the previous session for both Brent crude and WTI. Brent futures increased by 27 cents, or 0.3%, reaching $92.44 per barrel by 0330 GMT. Meanwhile, U.S. West Texas Intermediate gained 37 cents, or 0.4%, to settle at $85.38. This upward movement occurred after Monday’s significant decline, which ended a streak of six consecutive sessions of gains across the two main crude benchmarks.
Brent crude closed $2.22 lower on Monday at $92.17 a barrel, representing a drop of 2.35%. WTI also fell by $2.05, a similar 2.35%, closing at $85.01. During trading, the U.S. benchmark hit its lowest point in a week. The losses came after two weeks of gains and were influenced by new U.S. economic sanctions aimed at Iran and entities maintaining business ties with the country.
Despite the recent decline, Brent stayed above the $90 mark amid ongoing geopolitical and supply-related concerns. Since the start of the U.S.-Israeli conflict with Iran on February 28, oil supplies have experienced disruptions. Additionally, shipping through the Strait of Hormuz has faced restrictions amidst the conflict, which previously handled about 20% of global oil trade.
U.S. sanctions deepen restrictions on Iran-related activities
On Monday, U.S. Department of the Treasury announced the launch of Operation Economic Outcast, expanding sanctions related to Iran. These measures target digital assets, technology, gold, aviation, and shipping sectors. Nearly 60 entities, individuals, and vessels across various jurisdictions faced sanctions. This included networks involved in Iranian oil transportation and revenue, as well as groups linked to nuclear procurement, missile technology, and cyber activities.
The new sanctions framework also enables U.S. authorities to target foreign entities operating within or supporting the five recently identified Iranian economic sectors. The Treasury specified that countries involved will be given specified deadlines to address Iran-related activities flagged by U.S. officials. These measures build upon existing restrictions on Iran’s petroleum and petrochemical industries. The decline in oil prices on Monday followed the sanctions announcement after six consecutive sessions of gains for Brent and WTI.
Strait of Hormuz incident coincides with declining U.S. oil reserves
Security issues at sea continued to influence physical oil flows on Tuesday. According to the United Kingdom Maritime Trade Operations, an unidentified projectile struck and disabled an oil tanker off the coast of Oman, approximately 9 nautical miles, or 16.7 kilometers, northeast of Ash Shishah. Iran also identified 45 tankers on Monday that it claims violated its regulations for crossing the Strait of Hormuz, warning that it may take action against those vessels.
Meanwhile, U.S. emergency oil inventories have decreased amid ongoing supply disruptions. The Department of Energy reported a reduction of about 3.7 million barrels in crude stocks stored in the Strategic Petroleum Reserve last week, bringing the reserve down to 289.7 million barrels — its lowest level since November 1982. Against this supply backdrop, Brent was trading at $92.44 early Tuesday, while WTI stood at $85.38, both benchmarks recovering some of Monday’s losses.
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