Oil prices fell more than $1 on Monday as investors took profits and expected new U.S. sanctions on Iran.
Brent crude futures fell $1.16, or 1.23 per cent, to $93.23 a barrel at 11:31 a.m. GMT.
U.S. West Texas Intermediate crude declined $1.55, or 1.78 per cent, to $85.51 a barrel.
Both contracts recorded a second consecutive weekly gain last week, rising more than five per cent.
The gains followed stalled U.S.-Iran peace negotiations, which have constrained oil shipments through the Strait of Hormuz.
The waterway previously carried about one-fifth of global oil supplies and remains a major route for energy shipments.
U.S. Treasury Secretary Scott Bessent is expected to announce new measures against Iran during a press conference later Monday.
Mr Bessent has threatened to impose what he described as “the toughest sanctions in history” on Iran.
U.S. President Donald Trump has also threatened sanctions against countries trading with Iran.
PVM analyst Tamas Varga said an embargo could reduce regional oil supplies and prompt tighter restrictions on Iranian oil exports.
He added that Iran could retaliate with fresh attacks against oil installations across the Middle East.
Iran has condemned the planned U.S. sanctions, while President Masoud Pezeshkian has called for a diplomatic solution.
Pakistan’s army chief was visiting Tehran on Monday for mediation talks ahead of the expected U.S. announcement.
Shipping data showed fewer than 20 commodity vessels transited the Strait of Hormuz during the weekend amid restrictions affecting energy shipments.
Iran, however, allowed some Iraqi oil tankers to pass through the strait following repeated requests from Baghdad, Iranian state news agency IRNA reported.
Traders said Iraq’s SOMO and QatarEnergy had also offered crude for loading inside the strait.
SEB analyst Bjarne Schieldrop said current Brent prices suggested that sufficient oil was still flowing through the Strait of Hormuz.
He said a major turning point could occur if Iran decided to completely close the waterway using rockets and drones.
Brent crude has risen to about $92 a barrel from $71 in June, driven by declining inventories and concerns over prolonged Middle East disruptions.
Morgan Stanley analysts said they had raised their Brent price forecasts, projecting prices could peak at $100 a barrel in the fourth quarter.
Meanwhile, the International Energy Agency is not currently considering another release of oil from strategic reserves, its chief Fatih Birol said.