Oil prices fell on Tuesday as escalating economic and trade tensions between the United States and its trading partners raised concerns over global oil demand outlook. International benchmark Brent crude futures for November delivery traded at $89.66 per barrel at 9:55 a.m. local time (0655 GMT), down 0.97% from the previous close of $90.54. US benchmark West Texas Intermediate (WTI) crude futures for October delivery traded at $84.20 per barrel, down 0.95% from $85.01.
The United States launched Operation Economic Outcast on Monday, an expansive sanctions campaign aimed at further isolating Iran from the global financial system. Treasury Secretary Scott Bessent stated that the objective is to "sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone." The Treasury blacklisted more than 60 entities, individuals, and vessels worldwide, with sanctions targeting Iran's "most vital lifelines," including aviation, shipping, gold, technology, and digital assets. Bessent emphasized that the "strength of America's economy" enabled Washington to conduct such a financial offensive alongside military operations.
However, market response remained muted as investors assessed how effectively the measures would be enforced, particularly against countries continuing to buy Iranian oil. Prices also came under pressure as Washington appeared to prioritize economic measures over additional military action, easing immediate concerns about disruptions to Middle Eastern oil supplies. US Defense Secretary Pete Hegseth stated Monday that Washington is not ruling out further military strikes on Iran.
Hegseth told reporters: "If we need to use kinetic strikes, we'll use them." He added that economic pressure was currently hurting Iran the most but that the US was "by no means" ruling out strikes "anywhere in the Strait of Hormuz or around Iran." Hegseth claimed the US maintains control of the Strait of Hormuz, stating Washington's blockade was "ironclad" and that Iran was unable to move oil through the waterway. Renewed trade tensions between the United States and Canada also added to concerns about the global economic outlook and energy demand. President Donald Trump stated on his Truth Social platform Monday that Canada is "among the worst Nations in the World to deal with," emphasizing that "WE DON'T NEED CANADA, THEY NEED US." Approximately 70% of Canadian exports go to the US.
Following the breakdown in negotiations, a threatened 50% US tariff on CAN$28 billion (US$20.21 billion) worth of Canadian goods took effect Saturday. Trump also announced that an additional 50% tariff on Canadian cars, trucks, and auto parts would take effect January 1 after talks failed to produce an agreement. Ontario Premier Doug Ford and President Trump traded insults Monday following the breakdown of trade talks.
Ford called Trump a "dictator" and the "king of bankruptcies" after the president criticized him on Truth Social. Trump repeated his claim that Canada "couldn't survive" without the US and referred to Prime Minister Mark Carney as "Governor Carney," referencing his calls for Canada to become the 51st US state. Ford responded by threatening to impose an export tariff on electricity supplied by Ontario to approximately 1.5 million homes and businesses in Michigan, New York, and Minnesota.
He also noted that Alberta supplies the US with approximately 4.1 million barrels of oil per day. Source: Anadolu Agency (aa.com.tr), August 25, 2026
Source: aa.com.tr