By Anushree MukherjeeBengaluru — Oil prices fell more than 3% to a one-week low on Tuesday as traders shrugged off the latest US sanctions campaign against Iran, viewing economic pressure as posing less risk to oil supplies than a military escalation.Brent crude futures were down $3.07, or 3.33%, to $89.10 a barrel by 2.07pm, while US West Texas Intermediate crude was down $2.93, or 3.45%, at $82.08. Both benchmarks hit their lowest levels since August 17.The shift from military conflict to economic pressure in the US-Israeli war with Iran has reduced some of the oil market’s anxiety, said Ole Hansen, head of commodity strategy at Saxo Bank, adding the US sanctions announcement was not as forceful as some traders had expected. Treasury secretary Scott Bessent unveiled the measures on Monday, almost six months into a conflict the US has struggled to resolve. He declined to identify the countries that would be targeted or say when penalties would take effect, adding he would give them time to comply with the new directives. IIran vowed to retaliate against the sanctions and expressed confidence that major trading partners would resist Washington’s pressure campaign. While defence secretary Pete Hegseth said on Monday the US would not rule out using military force against Iran, analysts said the shift to economic coercion had reduced some concerns about further threats to Middle Eastern oil supply, even though the key Strait of Hormuz remains largely closed.Hormuz disruption persists“Iran still retains the ability to respond by disrupting shipping, which continues to keep a residual premium in the oil price,” said Tim Waterer, chief market analyst at KCM. An oil tanker was struck on Tuesday by an unidentified projectile and disabled about nine nautical miles (16.7km) northeast of Oman’s Ash Shishah, the UK Maritime Trade Operations said. Just two tankers transited the Strait of Hormuz on Monday, the lowest daily tally of commodity vessels since early May, with both entering the Gulf, shipping data showed.The conflict has heightened concerns over the Strait of Hormuz, the waterway through which roughly one-fifth of global oil consumption used to typically pass before the US-Israeli war with Iran started on February 28, raising fears of broader supply disruptions. The supply disruptions have prompted countries to draw down commercial and strategic oil reserves.Elsewhere, the Novoshakhtinsk oil refinery in Russia’s southern Rostov region was damaged by a Ukrainian drone overnight and suspended operations, the regional governor said, while a fire broke out at the Atyrau oil refinery in western Kazakhstan on Tuesday, owner KazMunayGas said. Reuters