Oil drops as Iran says it has a plan for Trump's sanctions

Oil prices fell more than 3% on Tuesday after reports indicated the U.S. does not expect a return to full-scale war with Iran, with Brent crude dropping to $89.05 per barrel and West Texas Intermediate falling to $81.99. The decline extended Monday's losses as Washington shifted focus from military strikes to economic pressure, unveiling new sanctions on Iran and its trading "enablers" in an initiative Treasury Secretary Scott Bessent called "the single greatest financial offensive ever." Defense Secretary Pete Hegseth said kinetic strikes remain possible but economic pressure currently hurts Iran most. Iranian Economy Minister Ali Madanizadeh said Tehran has a two-year plan to withstand sanctions, while China vowed to defend its interests against what it called "illicit unilateral sanctions." Analysts noted the U.S. stopped short of secondary sanctions on China, Iran's largest oil buyer, to avoid financial disruption and retaliation.