CRUDE oil prices held near US$85 a barrel on Tuesday after falling more than 2% in the previous session, as intensifying US economic pressure on Iran and its trading partners heightened uncertainty over the reopening of the strategically vital Strait of Hormuz.
Brent crude was trading near US$92 a barrel after also declining more than 2% in the previous session, with investors weighing the potential impact of new US sanctions against the risks of further disruption to energy supplies across the Middle East.
US Treasury Secretary Scott Bessent announced plans to intensify pressure on Iran by targeting countries that continue doing business with Tehran, while President Donald Trump said those countries would be given a specific deadline to sever their economic ties with Iran or face unilateral US penalties.
The measures have left markets uncertain over whether Washington’s latest strategy will accelerate efforts towards resolving the US-Iran conflict or instead prolong tensions and delay the full reopening of the Strait of Hormuz.
The risks to regional energy flows remain elevated.
The UK Navy reported that an oil tanker was struck and disabled near Oman, while Iran-backed Houthi militants said they had fired on a Saudi Arabian supertanker travelling through the Red Sea.
The Strait of Hormuz remains a major concern for energy markets because of its importance to global oil shipments, with any prolonged disruption threatening to tighten supplies and push prices higher.
Concurrently, the US dollar index edged up to 99.0 on Monday but remained close to a three-month low following its third consecutive weekly decline.
The greenback remained under pressure after the US Treasury doubled its buyback operations for longer-dated government bonds, with reports suggesting Bessent could deploy nearly US$1 trillion from the Treasury’s General Account to help finance the operations.
Trade tensions between Washington and Ottawa also intensified after the United States imposed 50% tariffs on Canadian goods, prompting Canada to pledge dollar-for-dollar retaliation.
Trump also said tariffs on cars, trucks, automotive parts and steel would rise to 50% from January 1, 2027.
On the geopolitical front, Washington expanded secondary sanctions against entities and countries maintaining business ties with Iran.
Bessent warned that a major financial institution could be sanctioned as early as this week and indicated that China, a major buyer of Iranian oil, would not necessarily be exempt.
The combination of sanctions, trade tensions and heightened security risks around key Middle East shipping routes is keeping investors focused on the potential for further volatility in oil and currency markets. - August 25, 2026
