Oil slides over 3% to hit one-week low as US unveils tough sanctions on Iran

Oil prices slid more than 3 per cent on Tuesday, with Brent falling below $90, as investors digested the potential effects of the sweeping new set of sanctions the US has announced on Iran. Brent, the benchmark for two-thirds of the world's oil, was down 3.1 per cent to $89.31 a barrel at 3.55pm UAE time. West Texas Intermediate, the gauge that tracks US crude, retreated 3.34 per cent to $82.17 per barrel. Crude prices fell to a one-week low after posting <a href="https://www.thenationalnews.com/business/energy/2026/08/21/oil-heads-for-weekly-gain-while-gold-and-bitcoin-jump-on-us-treasury-buyback-plans/" target="_blank" rel="noreferrer" title="https://www.thenationalnews.com/business/energy/2026/08/21/oil-heads-for-weekly-gain-while-gold-and-bitcoin-jump-on-us-treasury-buyback-plans/">sharp weekly gains last week</a>, with Brent adding 6.6 per cent and WTI jumping 5.7 per cent, after US Treasury Secretary Scott Bessent on Thursday said Washington would impose even more punitive economic sanctions on Tehran to break the impasse in negotiations. The US move, Operation Economic Outcast, was announced on Monday and seeks to isolate Iran's economy in an effort to break the deadlock in the war. The Treasury Department said it was broadening the scope of secondary sanctions on companies and countries that do business with <a href="https://www.thenationalnews.com/tags/iran" target="_blank" rel="">Iran</a>. It said every country would be given a deadline to shut down Iran-related activity and serve a final notice to cut its economic ties. “The markets are stabilising … this morning's stability comes as investors weigh the impact of expansive new economic sanctions against Iran announced by the US Treasury, balancing them against underlying shipping constraints and geopolitical flashpoints,” analysts at US energy firm Duncan Oil said. Iran's Supreme National Security Council Secretary Mohsen Rezaei had said Tehran could halt all oil exports through the Strait of Hormuz if the US proceeded with its plan, adding to oil market volatility. Strikes on vessels continued in the key waterway, which before the war carried about a fifth of the world's energy exports. Early on Tuesday, an oil tanker was hit by an unidentified projectile off the northern tip of Oman’s Musandam peninsula, the UK Maritime Trade Operations said. The situation has been complicated by attacks from Yemen's Houthi rebels, particularly targeting Saudi-linked ships in the Red Sea. The US has also sent a message through Pakistan to Iran on reopening the Strait of Hormuz, <a href="https://www.thenationalnews.com/news/mena/2026/08/25/live-us-sanctions-on-iran/" target="_blank" rel="noreferrer" title="https://www.thenationalnews.com/news/mena/2026/08/25/live-us-sanctions-on-iran/">a senior source told <i>The National</i> on Tuesday</a>, adding that Tehran has yet to make any commitments. Gold, meanwhile, eased after hitting a three-month high, amid a stronger dollar and profit-taking. The precious metal, widely considered a hedge against inflation, inched up 0.1 per cent to about $4,642 an ounce.