Oil Drops Ahead of 'Toughest' U.S. Iran Sanctions

Bessent told CNBC last week the goal is to "collapse" Iran's economy with the "toughest sanctions in history." The Trump administration is pressing allies and other nations to cut economic ties with Tehran. President Donald Trump had warned of "the most crushing economic operation ever taken against any country" and threatened steep penalties for countries that help Iran dodge sanctions.

Iran pushed back. The Islamic Revolutionary Guard Corps said Tehran has ways "to counter the adverse effects of the enemy's war" and can "easily establish economic relations with countries," according to Iranian state media.

Commonwealth Bank of Australia expects oil prices to stay volatile in the second half of 2026 as markets weigh whether Washington's isolation push will succeed and how Tehran might respond. "It is unclear whether U.S. policy to economically isolate Iran will prove effective," CBA wrote in a note. "But if the US measures do work as intended, Iran's ability to respond via increased violence becomes a growing risk for energy markets to consider."

CBA sees Brent crude trading between $70 and $100 a barrel in the second half. The bank said prices could fall toward the bottom of that range if oil flows through the Strait of Hormuz recover even modestly. It estimated that just 50% to 60% of pre-war quantities would be enough to revive oversupply expectations.