WTI drops below 85.00 as traders take profits ahead of new US sanctions on Iran

WTI crude oil prices pulled back after two consecutive days of gains, trading near $84.80 per barrel during Monday's Asian session, after briefly falling below the $85 mark. Investors are locking in profits ahead of expected tougher US sanctions on Iran, putting short-term pressure on oil prices.

**Sanctions expectations and profit-taking intertwine**

Market sources indicate the US is expected to announce stricter sanctions on Iran. While this anticipation should normally support prices, traders are choosing to secure gains before the news is officially released, dragging prices down from recent highs. WTI had recorded gains for two straight sessions prior, with some long positions exiting near key resistance levels. According to Reuters, the Trump administration had previously signaled additional economic sanctions on Iran, though specific details have yet to be disclosed.

**Geopolitical risk remains the core variable**

Ongoing tensions around the Strait of Hormuz, which carries roughly 20% of global seaborne crude supply, continue to pose a supply disruption risk that could underpin prices. Market data shows crude prices recently approached one-month highs with multiple consecutive sessions of gains, reflecting a persistent geopolitical premium. However, sentiment has turned cautious ahead of the formal sanction announcement, prompting some traders to reduce exposure.

**Short-term direction hinges on news flow**

Prices are currently in a high-level consolidation phase. The next move will depend on the severity of US sanctions on Iran and Tehran's response. If sanctions prove tougher than expected, oil could regain upward momentum; conversely, if measures fall short of market expectations, profit-taking pressure may intensify. Analysts note that until the situation becomes clearer, oil price volatility could increase, and investors should remain alert to short-term pullback risks.