Oil drops to 12-day low as new US sanctions shift focus from strikes on Iran

Oil prices fell sharply Tuesday after Washington expanded sanctions on Iran and signaled economic pressure, rather than immediate military action, as its main tool. Brent crude dropped as much as 3.2% to $89.20 a barrel, while West Texas Intermediate fell 3.3% to $82.21, extending losses from Monday. Treasury Secretary Scott Bessent said countries doing business with Iran risk losing access to the dollar-based financial system, though he did not name targets or set a start date. Analysts said the market viewed sanctions as less threatening to physical crude flows than renewed strikes, even as risks persisted around the Strait of Hormuz. A tanker was also hit by an unidentified projectile northeast of Oman, underscoring the region's shipping danger.