Texas oil drops 2.4% after U.S. announces economic operation against Iran

Texas crude oil prices fell 2.4% to $85.01 a barrel on Monday, reacting to the United States' announcement of a new economic operation aimed at blocking Iran's revenue sources. The WTI futures for October delivery saw a decrease of $2.05 from the previous closing price.

U.S. Treasury Secretary Scott Bessent outlined the "sectoral sanctions" as part of the 'Economic Pariah' operation. This initiative targets five vital areas Iran exploits in other countries: digital assets, technology, gold, aviation, and maritime transport. Bessent emphasized that these are indirect sanctions for trading with the Iranian regime, and "no one is exempt."

Despite the increased economic pressure, Bessent stated last week that Washington would not resume direct attacks against Iran. This economic strategy comes amid a lack of progress in negotiations related to the Strait of Hormuz and the ongoing six-month war.

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Tehran threatened to treat countries supporting the U.S. campaign as participants in the war and raised the possibility of preventing oil from leaving the Persian Gulf.

Analysts note that the possibility of diplomatic breakthroughs appears increasingly distant. They point to China as the only significant buyer of Iranian crude oil, suggesting that the traffic in Hormuz will likely remain low. Jorge León, head of geopolitical analysis at Rystad Energy, commented, "Tehran threatened to treat countries supporting the U.S. campaign as participants in the war and raised the possibility of preventing oil from leaving the Persian Gulf."

The focus now shifts to whether China will comply with the sanctions and how Iran might retaliate. Last week, Texas crude saw a cumulative increase of 5.5%, driven by the expiration of a 60-day deadline for U.S.-Iran peace negotiations without results.

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no one is exempt.