Brent crude dropped 1.6% to $92.81 a barrel on Monday. ActionForex reported traders were taking profits ahead of a new round of US sanctions on Iran and its trading partners. US Treasury Secretary Scott Bessent has billed the measures as an "Economic D-Day," while Iran has warned that no oil will flow from the Gulf if the confrontation continues.
Brent crude, the global oil benchmark, dropped 1.6% to $92.81 a barrel on Monday, retreating after a sharp weekly rally as traders locked in gains ahead of Washington's expected sanctions announcement. Asian equities fell alongside oil, with Japan's Nikkei down nearly 0.7%, Hong Kong's Hang Seng dropping 1.9% and South Korea's Kospi tumbling 3.2%.
Bessent brands the package an "Economic D-Day"
Bessent is set to hold a press conference to detail new sanctions targeting Iran's trading partners. According to ActionForex: "Economic D-Day" is how the US Treasury Secretary has described the measures. He has framed them as an unprecedented campaign of economic isolation meant to pressure Iran and its trading partners into compliance.
Direct military strikes between the US and Iran have eased in recent weeks, but the lack of meaningful negotiations leaves little room for a near-term deal. Iran has warned that no oil would flow from the Gulf if the economic war continues.
Jackson Hole adds another test for markets
The sanctions news lands days before the Fed's Jackson Hole conference, where new Fed chair Kevin Warsh speaks on Friday. Analysts said bond traders would be looking for signals from Warsh on the Fed's commitment to fighting inflation.
Bessent's press conference is due later on Monday, the detail oil traders are waiting on next.
Sources: The Guardian, ActionForex
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