SINGAPORE / RankWire.AI / – Oil prices saw modest recovery on Tuesday after suffering declines of more than 2% in the previous session for Brent crude and WTI. Brent futures increased by 27 cents, or 0.3%, reaching $92.44 a barrel by 0330 GMT. Meanwhile, U.S. West Texas Intermediate rose 37 cents, or 0.4%, to $85.38. This rebound followed a sharp drop on Monday, ending six straight days of gains across both main crude benchmarks.
Brent crude closed $2.22 lower on Monday at $92.17 a barrel, marking a 2.35% decrease. WTI decreased by $2.05, also 2.35%, finishing at $85.01. The session saw the U.S. benchmark hit a one-week low. The declines came after gains over the previous two weeks and amid traders digesting new U.S. economic measures targeting Iran and related companies.
Despite the recent fluctuations, Brent stayed above $90 a barrel. Geopolitical tensions and supply issues continue to influence global energy markets. Oil supplies have been disrupted since the U.S.-Israeli war with Iran started on February 28. Shipping through the Strait of Hormuz has also faced restrictions during this period. Before the conflict, about 20% of global oil consumption was transported through this waterway.
U.S. broadens sanctions targeting Iran
U.S. Department of the Treasury introduced Operation Economic Outcast on Monday. They also expanded sanctions on Iran-related economic activities. These measures now include digital assets, technology, gold, aviation, and shipping. Nearly 60 entities, individuals, and vessels across multiple jurisdictions were sanctioned. The targeted networks are connected to Iranian oil transportation, revenue, nuclear procurement, missile technology, and cyber operations.
The new sanctions enable U.S. authorities to target foreign entities involved in or supporting five newly designated Iranian sectors. The Treasury stated countries will have specific timelines to address these Iran-related activities. These measures complement existing restrictions on Iran’s petroleum and petrochemical industries. Monday’s market dip followed the announcement after six consecutive sessions of gains for Brent and WTI.
Strait of Hormuz incident aligns with shrinking U.S. reserves
Maritime security issues also impacted physical oil flows on Tuesday. United Kingdom Maritime Trade Operations reported that an unidentified projectile struck and disabled an oil tanker near Oman. The incident occurred roughly 9 nautical miles, or 16.7 kilometers, northeast of Ash Shishah. Iran on Monday identified 45 tankers it claimed violated its crossing rules of the Strait of Hormuz. Iran warned it would take action against these vessels.
U.S. emergency oil reserves have decreased amid these disruptions. The Department of Energy reported a drop of about 3.7 million barrels in crude stocks last week. The Strategic Petroleum Reserve is now at 289.7 million barrels, the lowest since November 1982. Against this backdrop, Brent traded at $92.44 early Tuesday. WTI stood at $85.38 after both benchmarks recovered some of Monday’s losses.