Oil drops as Iran says it has a plan for Trump’s ‘economic D-Day’

Oil prices fell to more than a one-week low on Tuesday, as investors shrugged off supply concerns and Washington and Tehran’s intensifying war of words ahead of “economic D-Day.”

Front-month Brent crude oil futures were last seen trading 3% lower at $89.40 per barrel, its lowest since Aug. 13. U.S. West Texas Intermediate crude oil futures fell 3.2% to trade around $82.32 a barrel.

Tuesday’s moves extended declines seen on Monday, when Brent prices fell by 3%.

Washington has made moves to exert huge economic pressure on Iran in recent days, with the U.S. government unveiling a fresh raft of sanctions on Iran and so-called “enablers” that continue to trade with the country. The White House has labeled its efforts an “economic D-Day,” with Treasury Secretary Scott Bessent touting the initiative as “the single greatest financial offensive ever” on Monday.

Meanwhile, U.S. Defense Secretary Pete Hegseth told reporters on Monday that the prospect of further American strikes in the Middle East remained on the table.

“If we need to use kinetic strikes, we’ll use them,” he said. “If Iran is foolish enough to overplay their hand or mess with the American military, we’ll do what we need to do.”

“Economic pressure hurts them the most right now,” he said of the Iranian regime. “But by no means are we foreclosing using kinetic strikes anywhere in the Strait of Hormuz or around Iran.”

Iranian Economy Minister Ali Madanizadeh said on state television that Tehran is “fully prepared” to withstand more U.S. sanctions.

“The government is and was ready and has a two-year plan to manage these events,” he said. “We have our own tools and we know how to play the game.”

China, one of Iran’s largest trading partners, has repeatedly called for a diplomatic end to the U.S.-Iran war. Under the new “economic D-Day” plans, China could face ramifications for continuing to buy Iranian oil.

On Tuesday, Chinese Foreign Ministry Spokesperson Lin Jian told reporters Beijing would “do everything necessary to firmly safeguard its rights and interests.”

“China has made clear on many occasions its firm opposition to illicit unilateral sanctions that have no basis in international law or the authorization of the UN Security Council,” he said. “Economic warfare and maximum pressure provide no solution.”

He added that China’s cooperation with Iran is conducted within the framework of international law, and should therefore not be disrupted.