WTI drops to near $82 as US pressure on Iran appears less risky

During Tuesday's European trading session, WTI crude futures extended losses, trading around $81.84 after previously falling to the $82 mark. The market is reassessing the actual supply disruption risk from US economic pressure on Iran, following a multi-week strong rally that has triggered notable profit-taking.

**Supply expectations waver amid US-Iran tensions**

US Treasury Secretary Bessent wrote in the Financial Times that Iran is approaching an "economic D-Day," with new rounds of sanctions expected to be announced. Iran has responded firmly, stating that if the economic war continues, no oil exports will flow through the Strait of Hormuz or the Persian Gulf. The strait previously carried roughly 20% of global oil supply, and any substantial disruption would significantly tighten the market. However, current pricing suggests the market views economic pressure as having a smaller impact on prompt supply compared to a military conflict scenario.

**Oil prices pull back sharply from highs**

According to market sources, after two consecutive weeks of cumulative gains exceeding 5%, oil prices have seen a clear pullback this week. Brent crude futures had previously peaked at $93.51 per barrel, while WTI crude futures retreated from above $86. Energy consultancy Ritterbusch and Associates noted that the market may again be overreacting to repeated US statements—first warnings of major attacks, then signals of negotiations—a pattern that continues to cap the geopolitical risk premium in prices.

**Near-term direction hinges on sanctions details and Iran's response**

Bessant is expected to formally unveil a new round of sanctions targeting Iran. The severity of the specific measures and whether Iran follows through on its threat to block the strait will be key variables for the near-term direction of oil prices. If sanctions are implemented without actual blockade actions from Iran, prices could give back more of the geopolitical premium; conversely, any signs of disruption to transit through the Strait of Hormuz could quickly reverse the current downtrend.