Oil: Sanctions risk keeps market tense – Danske Bank

Danske Research Team highlights renewed geopolitical tension around Iran as Washington prepares tougher sanctions that could hit Oil flows from the Gulf. Brent is back near USD93/bbl after profit-taking on last week’s rally, with the bank stressing that fresh US measures and Iran’s threats of disrupted exports represent significant downside risks for global growth and commodity markets.

Brent eases as Iran tensions rise

"In commodities, Brent crude oil dropped to around USD93/bbl following a sharp weekly rally, as investors took profits ahead of an expected US announcement on tougher sanctions against Iran."

"In geopolitics, tensions between the US and Iran remain a key focus as Washington prepares to announce new sanctions targeting Iran's trade partners, with US Treasury Secretary Scott Bessent set to hold a press conference today."

"Bessent said Washington would impose the "toughest" sanctions in history, describing the measures as an unprecedented campaign of economic isolation designed to pressure Iran and its trading partners into compliance."

"The measures have been described by the US Treasury Secretary Scott Bessent as an "Economic D-Day", while Iran has warned that no oil will flow from the Gulf if the "economic war" continues. Although direct military strikes have eased in recent weeks, the lack of meaningful negotiations means the prospects for any deal are slim in the short term."

"The overarching story has not changed much. Four forces are currently shaping equity markets: the oil story around the Strait of Hormuz, the durability of the AI capex buildout, the recently added fear of dollar debasement and, most importantly, exceptionally strong macro data."