West Texas Intermediate crude oil traded on the back foot on Monday after gaining more than 5% last week.
The pullback comes even as the broader backdrop remains largely unchanged, with Middle East tensions elevated and shipping through the Strait of Hormuz still heavily restricted. Late Monday, WTI traded around $84.37 per barrel, down about 2.28% on the day.
Markets also face an immediate geopolitical risk as the United States is expected to announce fresh sanctions against Iran, while Tehran has warned that it could halt oil exports through the Strait and elsewhere in the Persian Gulf if Washington proceeds with its plans.
Strategists at BBH highlight the scale of Scott Bessent’s proposed campaign, describing it as the “single greatest financial offensive ever marshalled against an adversary,” aimed not only at Iran, but also at “the foreign networks that buy and transport its oil.”
They stress that “China is the critical pressure point,” noting that it is Iran’s largest trading partner and “buys roughly 90% of its oil exports.”
As a result, BBH argues that Beijing’s reaction will be pivotal, with “Beijing’s response… key to the direction of risk sentiment.”
(Source: OANDA)
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