Oil Prices Dip as Iran Threatens Strait of Hormuz Blockade Ahead of US Sanctions

Oil prices declined slightly on Sunday as the market awaited the announcement of new United States sanctions against Iran. Brent crude fell 0.66 percent to 93.77 dollars per barrel, while US oil dropped 0.68 percent to 86.47 dollars per barrel. The price dip comes as the US prepares to unveil what Treasury Secretary Scott Bessent has described as a financial offensive or economic D Day targeting Iran and the countries or companies that trade with it.

In response to the impending sanctions, Mohsen Rezaei, the secretary of Iran's Supreme National Security Council, threatened to block the Strait of Hormuz. Rezaei stated that not a single drop of oil would pass through the waterway if neighboring countries assist the US in weakening Tehran's economy. Iranian President Masoud Pezeshkian acknowledged that the country is currently facing severe economic difficulties, including inflation and instability in the banking and energy sectors.

Shipping data indicates that traffic through the Strait of Hormuz is already significantly below normal levels. One report noted that AIS detected transits are approximately 90 percent below pre conflict baselines. Some vessels have reportedly switched off transponders or used false flags to avoid detection. Recent data showed only a handful of vessels transiting the strait on Sunday, while traffic through the Bab el Mandeb Strait remained higher but also fluctuated.

Outlets with a center lean focused on the immediate market reaction and the specific threats made by Iranian officials. A center right outlet emphasized the physical decline in shipping volumes and the impact of projectile strikes on vessels in the region.