Global financial markets opened the week cautiously as oil prices and several major Asian shares slipped on Monday, August 24, with investors waiting for details of a new US sanctions package targeting Iran.
The market reaction comes as Washington prepares what US Treasury Secretary Scott Bessent has described as an exceptionally aggressive economic campaign against Tehran, raising fresh questions about Iran’s oil exports, global energy supplies and the future of the strategically important Strait of Hormuz.
Oil pulls back after last week’s surge
Oil prices moved lower on Monday after posting strong gains last week.
Reuters reported that Brent crude was down more than 1% in early trading, while US West Texas Intermediate also declined as traders waited for Bessent’s announcement on the new sanctions.
Another market report put Brent around US$93.22 a barrel and WTI near US$85.93, both down more than 1% during Monday trading.
The retreat came despite the fact that oil had gained sharply the previous week. On Friday, Brent settled at US$94.39 a barrel, while WTI finished at US$87.06, with both benchmarks recording their second straight weekly advance.
The conflicting signals underline the uncertainty facing traders: markets are worried about the possibility of tighter Iranian oil supplies, but investors are also positioning themselves ahead of Washington’s announcement.
Why Iran sanctions matter to the oil market
The biggest question is whether the new US measures will further restrict Iran’s ability to sell crude to international buyers.
Reuters reported that Iran’s oil exports to Chinese buyers have already been under pressure. China is particularly important because it accounted for more than 80% of Iran’s seaborne oil exports in 2025, according to Kpler data cited by Reuters.
Any successful effort to restrict those purchases could remove additional Iranian barrels from the international market.
But the effect may not be straightforward.
Some market sources cited by Reuters said refiners that have previously faced sanctions continued to process Iranian crude, suggesting that tougher measures may not completely eliminate Iranian oil sales.
That leaves traders watching not only the sanctions themselves, but also how aggressively countries, banks, shipping companies and oil buyers comply.
The Strait of Hormuz remains the bigger wildcard
Beyond sanctions, investors are closely watching the Strait of Hormuz, one of the world’s most important oil shipping routes.
The waterway has become a major source of uncertainty during the continuing US-Iran conflict. Reuters reported that concerns over Iran’s control of the strait have contributed to volatility in energy markets.
The Guardian has reported that roughly a quarter of global seaborne oil normally passes through the waterway, making any prolonged disruption potentially significant for global energy prices.
That is why a decline in oil prices on Monday does not necessarily mean the underlying risk has disappeared.
Instead, traders appear to be waiting for clarity on whether the latest US measures will intensify the supply disruption — or whether they could eventually encourage a diplomatic breakthrough.
Asian stocks also feel the pressure
Asian equities were mixed to lower as investors balanced geopolitical risks against a crowded week for global markets.
Reuters said investors were also monitoring rising US-Canada trade tensions, upcoming Nvidia earnings and comments expected from Federal Reserve Chair Kevin Warsh at the Jackson Hole economic-policy gathering.
The combination creates a difficult backdrop for investors.
Higher oil prices can increase inflationary pressure, potentially complicating central-bank decisions, while weaker economic growth can hurt corporate earnings and risk appetite.
MarketWatch reported that Goldman Sachs strategist Rich Privorotsky argued that developments in the oil market could matter more to investors than the Jackson Hole event because energy prices are closely linked to inflation expectations, consumer spending and financial-market conditions.
Iran rejects the pressure
Iran has pushed back against Washington’s latest threats.
Iranian Foreign Minister Abbas Araqchi dismissed the proposed sanctions as a sign of US desperation and said Tehran would not be forced into submission, according to Reuters.
That response adds another layer of uncertainty for markets.
If sanctions lead to a further deterioration in US-Iran relations, traders could once again price a larger geopolitical premium into oil.
On the other hand, any credible progress toward reopening the Strait of Hormuz or restoring oil flows could quickly reverse some of the recent price gains.
What happens next?
For investors, the immediate focus is on the details of the US sanctions announcement.
Three questions will be particularly important:
1. Will the sanctions directly target buyers of Iranian oil?
Measures affecting major purchasers could have a much larger impact on Iran’s export revenues and global supply.
2. Will China continue buying Iranian crude?
China’s role as Iran’s dominant seaborne oil customer makes Beijing’s response crucial.
3. Could Iran retaliate through the Strait of Hormuz?
Any additional disruption to shipping could quickly put upward pressure on crude prices and revive fears of a broader global inflation shock.
For now, markets are sending a mixed message: oil is falling, but the risks surrounding the oil market are rising.
The next move could depend less on Monday’s price action and more on what Washington announces — and how Tehran, China and the global shipping industry respond.
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