Oil prices fell about 3% on Tuesday as the US shifted its focus from military strikes to economic sanctions to pressure Iran. Brent crude, the international oil benchmark, fell 3.3% to $89.14 a barrel. US West Texas Intermediate crude, or WTI, dropped 3.1% to $82.36 a barrel.
The White House has described its new campaign against Iran as an “economic D-Day. Treasury Secretary Scott Bessent has called the campaign “the single greatest financial offensive ever. Trump warned Iran against placing new mines in the key waterway.
Oil prices have now fallen more than 5% this week after the US announced a new round of sanctions against Iran and companies and individuals that continue to trade with the country.
Bessent said last week that the stronger economic pressure on Iran makes a return to a major war less likely for now. President Donald Trump said Tuesday that the US Navy had informed him that all mines had been cleared from international waters in the Strait of Hormuz. CNBC said it had contacted US Central Command for comment. “Iran has been notified that any ship or boat placing new mines will be immediately and systematically destroyed,” Trump said in a Truth Social post.
Despite the shift toward economic pressure, the US has not completely ruled out military action against Iran. Hegseth warned that the US would respond if Iran made a move against the American military. Security Council.
Trump also said the US is closely watching the Strait of Hormuz through the Space Force. He said the US was watching “every square inch” of the Strait and pointed to Pickaxe Mountain and three other nuclear sites that he said had already been destroyed. Trump said a “Zero Tolerance” policy on placing new mines was now in effect. Defense Secretary Pete Hegseth said Monday that further US strikes in the Middle East remained possible. “If we need to use kinetic strikes, we’ll use them,” Hegseth told reporters. He said economic pressure is hurting Iran the most right now, but stressed that the US has not ruled out military strikes around the Strait of Hormuz or Iran. Iran, meanwhile, says it is prepared to deal with tougher US sanctions. Iranian Economy Minister Ali Madanizadeh said on state television that Tehran is “fully prepared” to withstand additional sanctions. Madanizadeh said the Iranian government already has a two-year plan to manage the situation. He said Iran has its own tools and knows how to respond to the US pressure. Chinese Foreign Ministry spokesperson Lin Jian said Tuesday that China would do everything necessary to protect its rights and interests. Lin said China opposes unilateral sanctions that it believes have no basis in international law or approval from the U.N. He also said economic warfare and maximum pressure cannot solve the problem. Lin said China’s trade and cooperation with Iran are carried out within international law and should not be disrupted.
