West Texas Intermediate crude is trading at $85.35 per barrel on Monday, pulling back from last week’s rally as markets brace for major US sanctions announcements targeting Iran. The energy market is on edge ahead of what traders are calling an economic D-Day, with speculation mounting that Washington’s new sanctions package could extend beyond Tehran to include enforcement measures against Russia or China if they continue purchasing Iranian oil.
The potential for broader sanctions represents a significant escalation that could tighten global oil supply chains and force major importers to seek alternative sources. Chinese refiners, who have increased Iranian crude purchases in recent months, face particular uncertainty. Any restrictions on Chinese or Russian involvement in Iranian energy trade would likely push oil prices higher by removing significant volumes from the market.
Traders are taking profits from last week’s gains while positioning defensively ahead of the announcement, creating choppy price action around the psychologically important $85 level.
FXnCO Insight
Monitor crude volatility closely this week as sanctions details emerge—long positions above $85 could see rapid acceleration if China or Russia face secondary enforcement.
Source: FXStreet