DTN Oil Update
Oil Futures Drop Amid Fresh Sanctions on Iran
HOUSTON (DTN) -- Oil futures prices dropped over 2% Monday after the Trump administration announced a new round of sanctions targeting Iran, even as global supply remained tight.
"We are launching an economic onslaught against Iran's financial connections around the globe," Treasury Secretary Scott Bessent said as he announced secondary sanctions on Iran.
Bessent warned every country that does business with Tehran to cut financial ties or face retaliation from the United States, according to media reports.
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The new sanctions aim to cut Iran off from the rest of the world as the Trump administration struggles to reach a ceasefire agreement after nearly six months of war. Details of the sanctions were undisclosed, but Bessent said U.S. President Donald Trump and top officials are contacting world leaders and counterparts demanding that they cut ties with Tehran.
Additionally, oil prices slipped after weekend reports indicated that crude shipments from the Middle East were continuing despite Iran's blockade of the Strait of Hormuz. White House officials said about 40 tankers passed through the strategic waterway on Friday via a US-protected corridor along Oman's coast, with Gulf oil flows rebounding to more than half their pre-war level.
On U.S. economic data, the Bureau of Economic Analysis' second of three estimates for Q2 GDP growth is scheduled for release on Wednesday. The first reading released last month showed GDP growth slowed from 2.1% year-on-year in the first quarter to 1.5% year-on-year in the second. The PCE price index, the Federal Reserve's preferred inflation metric, is also due on Wednesday.
The NYMEX WTI crude futures contract for October delivery declined by $2.05 to $85.01 barrel (bbl), while the front-month ICE Brent futures contract fell by $2.36 to $92.03 bbl.
Downstream, NYMEX ULSD futures for September delivery dropped $0.2220 to $4.2728 gallon, and front-month RBOB futures dipped $0.0707 to $3.2772 gallon.
The U.S. Dollar Index advanced 0.201 points to 98.93 against a basket of foreign currencies.
