Expectations of new sanctions trigger profit-taking, oil prices fall nearly 1.5% on Monday

1. International oil prices fell on Monday, with Brent crude oil futures dropping $1.26 from last Friday’s closing price to $92.51 per barrel, a decline of about 1.4%. WTI crude oil fell $1.30 from last Friday’s closing price to $85.32 per barrel, down about 1.5%. Investors chose to take profits ahead of the expected announcement of a new round of US Treasury sanctions against Iran, even though these measures may further disrupt Middle East oil supplies.2. Last week, both major contracts saw their second consecutive week of gains, with weekly increases exceeding 5%, as oil transportation through the Strait of Hormuz was hindered due to stalled US-Iran peace talks. US Treasury Secretary Bessent is scheduled to announce the “most severe sanctions in history” against Iran on Monday, and Trump has also threatened sanctions against Iran’s trading partners.3. Analysts from Commonwealth Bank of Australia pointed out that it is still uncertain whether the US policy of economically isolating Iran will be effective, but if the sanctions achieve the expected results, the likelihood of Iran responding with an escalation of violence will increase, which would become a key risk in the energy market.4. Iran condemned the upcoming new US sanctions, but President Pezeh Kiziyan still called for a diplomatic solution. IG analysts noted that Iran’s pragmatist faction is inclined to de-escalate the situation, but hardliners are more likely to fight to the end. By this weekend, the market will be able to better gauge which faction holds sway within Iran.5. According to trade sources, due to US blockades and the threat of sanctions, Iran has reduced the number of crude oil offers to major Asian buyers and significantly raised prices. However, according to Iran's official news agency, after repeated requests from Baghdad, Iran has allowed several Iraqi oil tankers to pass through the Strait of Hormuz.