US expands Iran sanctions, oil steadies

On August 25, 2026, oil prices steadied after falling more than 2% the previous session, as investors assessed the impact of expanded U.S. secondary sanctions against Iran. U.S. Treasury Secretary Scott Bessent unveiled the sanctions expansion on Monday, aiming to cut off Iran's economic lifeline and force an end to the U.S.-Israeli war on Iran that began on February 28. Countries were told to sever business ties with Iran or risk being cut out of the dollar-based financial system, though specific targets and effective dates were not disclosed. U.S. Defense Secretary Pete Hegseth said the U.S. would not rule out military force, but analysts viewed economic coercion as a lower-risk path for physical supply, leading to a modest decline in oil prices. However, Iran retains the ability to disrupt shipping, keeping a residual premium in prices. An oil tanker was struck by an unidentified projectile near Oman, and Iran named 45 tankers for violating its rules on crossing the Strait of Hormuz, threatening action including confiscation of cargoes. Supply disruptions have led to drawdowns in commercial and strategic reserves; the U.S. United States — Strategic Petroleum Reserve fell to its lowest level since November 1982.