Oil prices recover on Iran sanctions, but China holds the key to their impact

Oil prices recovered Tuesday after a sharp drop, as traders weighed new US sanctions on Iran against signals the measures pose less immediate supply risk than military action. Brent rose 0.3% to $92.44 per barrel, while WTI gained 0.4% to $85.38. The US Treasury expanded its campaign Monday, blacklisting over 60 entities and vessels, with warnings of secondary sanctions for continued business with Iran. China remains the key variable as the main buyer of Iranian crude, with analysts saying Tehran's exports may only suffer limited damage unless Beijing significantly reduces purchases. A tanker was hit off Oman Tuesday, and Iran blacklisted 45 tankers over Strait of Hormuz transit violations, keeping geopolitical premiums intact. US strategic reserves fell to their lowest since 1982, while Asian diesel and kerosene imports dropped sharply with refining margins staying high.