EMEA crude futures fell in after-hours trading on Tuesday after the US pivoted to sanctions to ramp up economic pressure on Iran, while President Trump claimed that the US Navy had cleared all mines from international waters of the Strait of Hormuz.
Brent crude futures slipped 3.7% to $88.79 per barrel, while Murban crude futures tumbled 8% to $93.30/bbl.
Gelber & Associates strategists said that fresh US sanctions targeted over 60 Iran-linked entities, vessels, and individuals, but traders judged the measures less likely to remove near-term barrels than renewed military escalation.
On Tuesday, President Trump said that the US Navy had removed or detonated all mines in the Hormuz and warned Iran that any attempt to lay new mines would trigger an immediate military response.
"Iran has been notified that any ship or boat placing new mines will be immediately and systematically destroyed," Trump said in a post on Truth Social.
Trump's remarks come as the US ratcheted up economic pressure on Iran on Monday but stopped short of imposing secondary sanctions on Tehran's trading partners.
US Treasury Secretary Scott Bessent unveiled what he called an "unprecedented" Washington campaign to sever Tehran from the global economy on Monday, warning that any state doing business with the country risks facing US sanctions.
However, Secretary Bessent said that countries will face a specific timeline to shut down links with Iran or face unilateral punishment.
"We are launching an economic onslaught against Iran's financial connections around the globe. Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone," he said.
Treasury's Office of Foreign Assets Control also sanctioned over 60 entities, individuals and vessels worldwide over Iran's procurement of nuclear and missile technology, cyber operations and oil revenue.
Iran, in response, condemned US sanctions, with Iranian Speaker of Parliament Mohammad Baqer Qalibaf saying Washington lacks the economic leverage to further restrict Tehran's relations with other countries.
"The Americans know that no one believes their bluster. The United States is not in an economic position to further restrict its relations with other countries beyond this point," Qalibaf said.
The US sanctions campaign against Iran comes as mediators continue efforts to end the Middle East conflict.
Oman's Foreign Minister Sayyid Badr Albusaidi arrived in Iran on Tuesday, where he met his Iranian counterpart to discuss future arrangements for the strait. Oman and Iran have agreed to work toward restoring safe navigation through the Strait of Hormuz, including the creation of a temporary joint navigational corridor and a project to clear mines at key energy chokepoints.
Meanwhile, threats to energy flows remain elevated, with the UK Maritime Trade Operations reporting on Monday that an oil tanker was struck and disabled by a projectile off the Omani coast, in the strait.
On Monday, the UKMTO reported an attack on a tanker 63 nautical miles west of Yanbu, Saudi Arabia. The vessel was struck by an unknown projectile, causing a fire on the main deck.