Oil prices fall as Bessent outlines new steps to punish Iran
Markets were in a cautious mood after the US Treasury Secretary announced new sanctions on Iran, with an analyst describing market moves as “pretty muted” ahead of what could be an “eventful week.”
Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on Aug 24, 2026 in New York City. (Photo: AFP/Angela Weiss)
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NEW YORK: Oil prices retreated as US Treasury Secretary outlined plans for more sanctions to punish Iran while stock markets mostly faltered on Monday (Aug 24) as investors looked ahead to key US inflation data and earnings from Nvidia.
While late August is typically a slow news period for markets, the US-Iran war, a trade battle between the United States and Canada and results from artificial intelligence bellwether Nvidia are keeping markets engaged.
“Overall, pretty muted moves ahead of what is likely going to be an eventful week,” said Angelo Kourkafas, from Edward Jones, describing markets as being in a cautious mood.
While the Dow posted modest gains, both the S&P 500 and Nasdaq dropped.
Oil prices fell more than two percent as Bessent laid out plans for the “economic asphyxiation” of Iran, expanding Washington’s secondary sanctions threats and warning of dire consequences for countries that do not join the campaign.
But his announcement named no specific countries beyond Iran and gave no timelines.
“The biggest concern, I think, in the oil market would be what type of retaliation might we see from Iran on energy infrastructure in the Middle East?” said Andy Lipow of Lipow Oil Associates.
In Europe, London closed up, with Paris and Frankfurt both ending the session lower.
“Trade tensions are back in the headlines this morning following the US and Canada’s failure to reach a trade agreement, tensions in the Middle East continue to disrupt oil flows, and debt levels across the so-called developed world keep rising,” said Ipek Ozkardeskaya at Swiss Quote.
Traders will also be watching this week’s annual gathering of central bankers, economists and finance chiefs in Jackson Hole in the United States, hoping for greater clarity on US monetary policy.
The meeting comes after Bessent said the US Treasury would buy back more of its own bonds to try to push down borrowing costs after the 30-year yield surged to levels last seen in 2007.
Those moves may be opposed by Federal Reserve Chairman Kevin Warsh because it complicates the Fed’s efforts to push down inflation, said Swiss Quote’s Ozkardeskaya.
“That’s why Jackson Hole could be explosive,” she said.
Earlier, Asian markets were hit by a fresh wave of pressure on technology stocks, with investors awaiting Wednesday’s earnings report from Nvidia.
South Korea’s tech-heavy Kospi fell more than three percent, weighed down by a sharp drop in Samsung Electronics shares, and Tokyo and Shanghai also closed lower.
On currency markets, the Canadian dollar fell 0.7 per cent against the US dollar, extending declines over the past month after Ottawa vowed to retaliate against new US tariffs after trade talks between the neighbors broke down.
“As a smaller, more open economy, Canada has more to lose from this, but Prime Minister Mark Carney seems to have opened the door to more fiscal stimulus to support affected business,” said analysts at ING.
Source: AFP/fs
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