TLDR
- Brent crude fell over 1% to around $93 a barrel after two weeks of gains
- Treasury Secretary Scott Bessent is set to unveil the strictest-ever U.S. sanctions on Iran Monday
- Iran allowed some Iraqi oil tankers to pass through the Strait of Hormuz after Baghdad’s requests
- Iran’s National Security Council warned no oil will pass through Hormuz if economic war continues
- Oil has rallied more than 50% in 2026 due to the ongoing U.S.-Iran war disrupting global supplies
Oil prices pulled back on Monday as markets digested mixed signals from the Strait of Hormuz and braced for a new round of U.S. sanctions against Iran.
Brent crude fell around 1.4% to $93.09 a barrel. West Texas Intermediate dropped 1.6% to $85.65. Both benchmarks had gained more than 5% over the previous two weeks.
The declines came after Iranian media reported that Tehran allowed some Iraqi oil tankers to transit Hormuz following requests from Baghdad. The move eased some immediate supply fears in the market.
The exact number of ships and volume of oil involved was not confirmed. But even this limited reopening was enough to push prices lower in early trading.
Bessent’s ‘Economic D-Day’ Warning
Treasury Secretary Scott Bessent said an “economic D-Day” was coming for Iran in an opinion piece published in the Financial Times. He is scheduled to hold a press conference at 2:00 PM ET Monday to announce details.
BREAKING: President Trump announces “the most crushing economic operation ever taken against a country” on Iran.
Trump says any country that does business with Iran will face “tremendous economic consequences.”
This is “Economic D-Day” President Trump says. pic.twitter.com/sp8PWZBnwO
— The Kobeissi Letter (@KobeissiLetter) August 19, 2026
Bessent wrote that Iran’s “enablers” who buy and transport its oil “would do well to consider the consequences.” The language signals pressure is also being directed at countries like China, the main buyer of Iranian crude.
Chris Weston, head of research at Pepperstone Group, said the op-ed signaled a tough message. He noted that any plan to disrupt Iranian crude imports carries “execution and reaction risk.”
Iran pushed back quickly. Mohsen Rezaee, Secretary of Iran’s National Security Council, warned that not a single drop of oil would be exported through Hormuz or anywhere in the Persian Gulf if the economic war continues.
Iranian officials also warned neighboring Gulf countries against cooperating with the United States.
Supply Disruptions Spread Beyond Hormuz
The conflict has spread beyond Hormuz. Saudi Arabia has been rerouting oil shipments from the Red Sea to a longer northern route after Iran-backed Houthi militants targeted shipping through the Bab el-Mandeb chokepoint.
Oil has rallied more than 50% so far in 2026. The U.S.-Iran war, now in its sixth month, has choked global crude and refined product supplies.
Hormuz was responsible for around 20% of the world’s oil supply before the conflict. Traffic through the waterway remains far below pre-war levels.
China’s top refiner Sinopec reported that gasoline consumption fell nearly 8% and diesel use dropped 12% in the first half of 2026. The company cited high prices and growing use of electric vehicles.
Russia separately rejected a truce offer from Ukraine over Black Sea agricultural shipping. Moscow said it wanted guarantees against strikes on its energy infrastructure before any deal.
The oil market remains on edge ahead of Bessent’s full sanctions announcement later Monday.
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