WTI Crude Hovers Near $85.00 as Market Awaits Iran Sanctions on Economic "D-Day"

WTI crude traded near $85.30 on Monday, giving back some of last week's gains, as market focus shifted to details of the upcoming new U.S. sanctions package against Iran.

**Scope of Sanctions as Key Variable**

According to market sources, investors are closely watching whether the new round of U.S. sanctions will target only Iran or extend to Russia or China. If the sanctions scope broadens, it could further tighten global crude supply expectations, providing support for oil prices; conversely, if the measures fall short of expectations, prices may extend their pullback. Earlier reports indicated that U.S. Treasury Secretary Bessent has announced that sanctions waivers allowing purchases of Iranian and Russian oil will not be renewed, with supply-side constraints still escalating.

**Geopolitical Premium vs. Diplomatic Signals in Tug-of-War**

Iran has recently signaled a willingness to make concessions on its nuclear program in exchange for sanctions relief. According to Phil Flynn, an analyst at Price Futures Group, this shows Iran is more open to discussing its nuclear program, but the risk of an attack on Iran remains elevated. The market is caught between two forces: expectations of supply recovery from U.S.-Iran talks on one hand, and actual transit volumes through the Strait of Hormuz still far below normal levels on the other, making it difficult to fully absorb the supply premium.

**Macro Uncertainty Weighs on Risk Appetite**

Tariff policy uncertainties are also influencing oil market sentiment. Bob Yawger, head of energy futures at Mizuho, noted that unclear tariff prospects are dragging on equities, with the oil market also under pressure. Until sanctions details are finalized, the market remains cautious overall, and oil prices may continue to consolidate around the $85 level in the near term.