Investors Take Profits as International Crude Oil Prices Drop Over $1 Per Barrel

International crude oil prices declined by over $1 per barrel on August 24 as investors took profits ahead of anticipated U.S. sanctions against Iran. Markets are closely monitoring whether Washington's upcoming actions will further disrupt energy supply chains in the Middle East.

London Brent crude futures dropped $1.22 (1.29%) to $93.17 per barrel, while U.S. West Texas Intermediate (WTI) crude futures fell $1.20 (1.38%) to $85.86 per barrel.

Prior to this, peace talks between the U.S. and Iran had stalled, restricting crude oil shipments through the Strait of Hormuz—a waterway that historically carried nearly one-fifth of global oil transport. Supply concerns pushed both benchmark crude futures up over 5% last week, marking their second consecutive weekly gain.

U.S. Treasury Secretary Scott Bessent is scheduled to hold a press conference at 2:00 p.m. Eastern Time on August 24 (18:00 GMT). Bessent has previously warned publicly that the U.S. will impose "the toughest sanctions in history" on Iran. Additionally, President Donald Trump has threatened economic sanctions against any country or partner maintaining trade relations with Iran.

Regarding the U.S. attempt to economically isolate Iran, Commonwealth Bank of Australia commodities analyst Vivek Dhar noted in a report that it remains uncertain whether such isolation policies will achieve their intended effect. However, if the sanctions prove effective, Iran’s capacity and likelihood to retaliate with radical violent measures would become a potential risk requiring careful assessment by energy markets.

Iranian officials strongly condemned the new sanctions plan expected from Washington, though President Masoud Pezeshkian called for resolving disputes through diplomatic means.

Factional divisions within Iran's leadership

IG Group market analyst Tony Sycamore analyzed that Iran's leadership is divided internally, with more pragmatic members favoring de-escalation, while hardliners may prefer confrontation. By the end of this week, the market should gain clearer insight into which faction holds dominance within Iran's leadership.

Trade sources revealed that U.S. blockade measures have severely damaged Tehran's shipping capabilities, significantly reducing the volume of crude oil quotations offered to Chinese buyers, while prices have surged. Meanwhile, according to Iran's official IRNA news agency, Iran specially approved partial Iraqi oil tankers to pass through the Strait of Hormuz on August 22, following repeated requests from Baghdad authorities.