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EMEA Oil Update: Brent Dips as Markets Shrug Off New US Sanctions on Iran

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Brent crude declined 1% on Tuesday as energy markets remained largely unfazed by the recently announced sanctions on Iran, with traders treating the new measures as marginal rather than immediately market-moving.

Brent extended fall by 1% to $91.30 per barrel, while Murban crude futures closed at $101.44/bbl on Monday and were not trading at the time of publication of this update.

"The market seems largely unfazed by Washington's push for tighter economic pressure on Iran, with traders treating the US effort to nudge partners away from Iranian trade as marginal rather than market-moving," ING analysts noted.

Treasury Secretary Scott Bessent unveiled an expansion of sanctions aimed at cutting off Iran's economic lifeline on Monday, warning countries to sever business ties or risk exclusion from the dollar-based financial system.

However, analysts noted the absence of a specific timeline for compliance or immediate secondary targets.

"The US announced more than 70 Iran-related sanctions and is threatening secondary sanctions on those that do not cut trading ties with Iran. However, China is the largest buyer of Iranian energy. It remains unclear whether the US would risk a fragile trade truce with Beijing over secondary sanctions," ING analysts added.

Market strategists emphasized that China remains the pivotal factor, as Beijing is the primary buyer of remaining Iranian energy exports.

According to Rystad Energy senior vice president Jorge Leon, unless China materially reduces its purchases, the direct impact on Iranian oil revenues will remain limited.

Meanwhile, data showed US Strategic Petroleum Reserve stocks fell by 3.7 million barrels to 289.7 million barrels, hitting their lowest level since November 1982.

Geopolitical shipping risks persisted alongside shifting supply dynamics. Maritime data from Kpler indicated that while total vessel crossings through the Strait of Hormuz edged higher last week, laden transits fell by 27%, underscoring growing commercial caution.

In the Red Sea region, security threats remained elevated after Yemen's Houthi militants targeted a Saudi oil tanker near the port of Yanbu.

Demand-side pressures also weighed on sentiment, as China's top refiner Sinopec reported steep drops in domestic gasoline and diesel consumption during the first half of the year, driven by high oil prices and the rising adoption of electric vehicles.

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US Oil Update: Crude Falls as Markets Weigh US Economic Pressure on Iran

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Oil & Energy

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Oil & Energy

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