Oil prices steady as investors weigh fresh US sanctions on Iran

Oil prices recovered ground on ​Tuesday, August 25, 2026, after settling down more than 2% in the previous session, with investors assessing the impact of ‌the latest United States sanctions against Iran.

Brent crude futures rose 27 cents, or 0.3%, to $92.44 a barrel by 0330 GMT, while U.S. West Texas Intermediate crude was up 37 cents, or 0.4%, at $85.38.

Both contracts settled lower on Monday, with U.S. crude oil falling to a one-week low on profit ​taking after prices rallied over the previous two weeks.

“The market seems largely unfazed by Washington’s push for tighter ​economic pressure on Iran, with traders treating the U.S. effort to nudge partners away from Iranian ⁠trade as marginal rather than market moving,” ING commodity strategists said in a statement issued on Tuesday.

U.S. Treasury Secretary Scott Bessent ​on Monday unveiled an expansion of sanctions to cut off Iran’s economic lifeline, to force an end to the war between ​them, telling countries they would need to sever their business ties or risk being cut out of the dollar-based financial system.

However, Bessent declined to identify the countries that would be targeted or reveal when those penalties would take effect, saying he would instead provide them time to comply ​with the new directive.

While United States Defense Secretary Pete Hegseth said on Monday the U.S. would not rule out using military force ​against Iran, the country is turning towards more economic coercion, which analysts said removed concerns about threats to Middle Eastern oil supply because ‌of ⁠the war.

KCM chief market analyst Tim Waterer said: “Markets appear to be pricing economic pressure as a lower-risk path for physical supply than kinetic action, which is why the initial reaction was for oil to move lower rather than spike higher.

“However, Iran still retains the ability to respond by disrupting shipping, which continues to keep a residual premium in the oil ​price.”

Middle East war: Iran vows to retaliate after US extends sanctions

Highlighting those threats, an oil ​tanker was struck on Tuesday ⁠by an unidentified projectile and disabled about 9 nautical miles (16.7 km) northeast of Oman’s Ash Shishah, the United Kingdom Maritime Trade Operations said.

Iran is still maintaining it should have control over ​the key Strait of Hormuz, which before the war started in February typically carried cargoes ​equal to about ⁠20% of global oil use.

On Monday, Iran named 45 tankers that had broken its rules on crossing the strait and threatened action against them, including confiscating their cargoes.

The supply disruptions as a result of the U.S.-Israeli war on Iran that started on ⁠February 28 ​have caused countries to draw down their commercial and strategic reserves.