U.S. oil rises nearly 2% to top $83 a barrel as slowing manufacturing raises interest rate cut hopes

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A general view of Isfahan Refinery, one of the largest refineries in Iran and is considered as the first refinery in the country in terms of diversity of petroleum products in Isfahan, Iran on November 08, 2023.
Fatemeh Bahrami | Anadolu | Getty Images

U.S. crude oil fell below $81 a barrel on Tuesday, the lowest level since March, as the market brushed off the threat of additional sanctions on Iranian oil.

Here are the latest energy prices:

  • West Texas Intermediate June contract: $80.92 a barrel, down 97 cents or 1.18%. U.S. crude oil is up about 13% this year.
  • Brent June contract: $86.09 a barrel, down 91 cents or 1.05%. The global benchmark is up about 12% this year.
  • RBOB Gasoline May contract: $2.65 a gallon, down 3 cents or 1.33%. Gasoline futures are up about 26% this year.
  • Natural Gas May contract: $1.76, down 1.62%. Natural gas is down 30% this year.

The House of Representatives passed legislation over the weekend that would broaden sanctions against Iran’s oil exports to include foreign ports, vessels and refineries that knowingly process crude from the Islamic Republic. The Senate could vote on the bill as soon as this week.

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WTI Vs. Brent

Under terms of the bill, President Biden would implement sanctions within 180 days of the legislation’s passage, but has the authority to waive penalties if he determines it is in the national security interests of the U.S.

“This bill significantly increases sanctions on Iran, it increases the enforcement mechanisms,” Helima Croft, commodities strategist with RBC Capital Markets, told CNBC’s Squawk Box on Monday.

The White House will face a “tough choice” this summer on whether to impose the sanctions or issue waivers due to concerns about a tight oil market, Croft said.

The Biden administration is very concerned about high oil prices ahead of the election, said Amrita Sen, founder and director of research at Energy Aspects.

“It’s a U.S. election year, and the U.S. is going to do absolutely anything in its power to make sure prices don’t go up,” Sen told CNBC’s “Crude Realities” on Tuesday.

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