Oil prices slip as U.S. readies fresh sanctions on Iran

Oil prices fell on August 24, 2026, as the U.S. prepared to impose new sanctions on Iran, despite the country’s currency hitting a record low and escalating geopolitical tensions. Brent crude dropped 1.7% to $91.06 per barrel, while U.S. benchmark crude declined 2.2% to $85.18 per barrel. The rial’s collapse to 2.02 million per U.S. dollar on informal markets—far below the official rate of 1.5 million—reflects Iran’s economic strain under existing sanctions and a U.S. naval blockade. Uncertainty over when the conflict with Iran will ease restrictions on oil tankers exiting the Persian Gulf has kept markets volatile, stoking inflation fears and pushing Treasury yields higher. Iran’s top security chief warned on August 23 that any nation backing the new U.S. economic measures would be seen as committing an “act of war.” Meanwhile, Iran’s president defended a memorandum of understanding with the U.S. as the best path to resolve the deadlock. Investors are bracing for key economic updates, including the U.S. personal consumption expenditures (PCE) inflation report on August 26 and the Commerce Department’s second-quarter GDP estimate. The Fed’s struggle to tame inflation—now stubbornly above 3%—has been compounded by global tariffs and disruptions in oil shipments through the Strait of Hormuz. Bond markets remain jittery after the 10-year Treasury yield surged to 4.73%, its highest level in over a year, before easing slightly to 4.72% on August 24. The 30-year yield, targeted by the Fed’s bond repurchases, neared its highest since 2007. Higher yields risk slowing economic growth and depressing asset prices. U.S. stock futures were mixed, with the S&P 500 down 0.2%, while European markets showed slight declines. Asian markets also retreated. The dollar strengthened to 159.23 yen, and the euro slipped to $1.1665.