Oil Prices Slip Ahead of U.S. Sanctions Announcement


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil prices softened Monday (8/24) morning after rising by 
more than 5% last week as traders were awaiting details about large scale U.S. 
sanctions on Iran expected to be revealed later today.

   By 08:45am ET, ICE Brent for October delivery fell $1.26 to $93.13 bbl, and 
NYMEX WTI for October delivery retreated $1.51 to $85.55 bbl.

   Downstream, NYMEX ULSD futures for September delivery slumped $0.1109 to 
$4.3839 gallon, and front-month RBOB futures softened $0.0822 to $3.2657 gallon.

   The US dollar index advanced 0.136 points to 98.865 against a basket of 
foreign currencies.

   Weekend reports of Middle Eastern oil flows successfully circumventing 
Iran's blockade of the Strait of Hormuz weighed on prices. White House 
officials have claimed that on Friday alone, some 40 tankers transited the 
chokepoint in a U.S.-protected corridor along the Omani coast, and stated that 
oil supply from the Persian Gulf was back above half of pre-war levels.

   These claims were impossible to verify using conventional ship tracking, 
given that these voyages would likely have taken place with turned-off 
transponders. Reuters on Monday reported that only 16 commercial vessels 
crossed Friday, citing ship tracking data from Kpler. An uptick in inbound 
tanker traffic, however, supported U.S. claims of easing supply disruptions.

   Later today, Treasury Secretary Scott Bessent is due to unveil details about 
a new U.S. sanctions package against Iran. Last week, U.S. President Donald 
Trump in a social media post declared "economic warfare and isolation" on the 
country, and threatened Iranian trading partners with severe economic 
consequences. Tehran warned against such a step, saying that their response 
would be "crushing, punishing and devastating".

   Weak demand signals, meanwhile, continued to keep prices in check. On 
Sunday, the latest earnings report from Sinopec, China's largest refining 
conglomerate, showed domestic refined product consumption plummeting 8.6% 
year-on-year in the first half of 2026. Gasoline and diesel sales fell by 7.9%, 
and 12%, respectively.

   In the U.S., 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.




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