Brent Hits 13-month High

Brent crude oil fell 3% to around $89.5 a barrel on Tuesday, extending a 2.4% loss in the previous session, as signs of possible diplomatic progress between Iran and the US eased concerns over supply disruptions. Pakistan’s army chief concluded a one-day visit to Tehran as part of efforts to reduce tensions, with reports suggesting he carried a proposal involving potential sanctions relief under an existing memorandum of understanding. Meanwhile, Washington’s latest measures to increase economic pressure on Iran were less severe than markets had anticipated. US Treasury Secretary Scott Bessent said countries trading with Tehran would be given a deadline to wind down their links or risk unilateral penalties. Investors remain uncertain whether the strategy will affect oil flows through the Strait of Hormuz or instead increase tensions with China, Iran’s main crude buyer.

Brent crude fell toward $90 per barrel on Tuesday, extending losses from the previous session as the US intensified economic pressure on Iran and its trading partners, with China reportedly not exempt from the measures. Treasury Secretary Scott Bessent announced plans to isolate Iran through sanctions targeting countries that continue doing business with the Islamic Republic, while President Donald Trump said those nations would be given a specific timeline to sever ties with Tehran or face unilateral US penalties. However, markets remain uncertain over whether the US measures will help accelerate or instead delay a potential resolution to the US-Iran conflict and the full reopening of Hormuz. Meanwhile, risks to energy flows in the Middle East remain elevated, with the UK Navy reporting that an oil tanker was struck and disabled near Oman, while Iran-backed Houthi militants said they had fired on a Saudi Arabian supertanker sailing through the Red Sea.

Brent crude oil extended losses to trade below $92 a barrel on Monday after US Treasury Secretary Scott Bessent announced plans to isolate Iran through sanctions targeting entities and individuals doing business with the country. While the measures are broad, investors are focused on their potential impact on Iran’s oil exports and whether they could accelerate or delay a resolution to the US-Iran conflict. Bessent warned that at least one major financial institution could face sanctions this week and indicated that China would not be exempt. Iran has previously demonstrated its ability to circumvent sanctions and has warned countries against supporting Washington’s efforts. Meanwhile, oil continues to flow through the Strait of Hormuz, with shipments remaining relatively strong despite elevated geopolitical risks. Reports indicated that around 16 million barrels crossed the waterway in a single night last week, although flows can vary significantly.