One key is how any new U.S. sanctions might affect China, the No. 1 buyer of Iranian crude oil

People walk past an anti-U.S. billboard in Tehran on Monday. Iran responded with defiance to the U.S. threatening a historic economic offensive.

Oil futures pulled back Monday as traders waited for details about new U.S. sanctions on Iran, with Treasury Secretary Scott Bessent due to speak about the issue at a news conference at 1 p.m. Eastern time.

West Texas Intermediate crude (CL00), the U.S. benchmark, recently was down 1.4% to about $86 per barrel, while Brent crude (BRN00), the global benchmark, slipped 1% to around $92 per barrel.

As the conflict between the U.S. and Iran nears the six-month mark, Bessent said in an op-ed in the Financial Times that "an economic D-Day is coming for Iran." He blasted "Iran's enablers" that "purchase and transport its petroleum," saying these nations "now exceed the limits of America's tolerance."

A key is how much the latest U.S. sanctions might affect China, which has been the main buyer of Iranian oil.

"If Washington goes after Chinese refiners or financial institutions with credible secondary sanctions, this stops being a narrow Iran operation and begins looking like another front in the U.S.-China economic war. Beijing would then have to decide whether to swallow the pressure or fire something back across the bow," Stephen Innes, managing partner at SPI Asset Management, said in a note.

"The first market reaction would probably be straightforward," he said. "A sanctions package with genuine teeth should lift crude oil and give the dollar DXY an initial geopolitical bid. But that may only be the first lap of the race."

The main U.S. stock indexes were trading mostly lower, with the S&P 500 SPX and the Nasdaq composite COMP in the red, while the Dow Jones Industrial Average DJIA gained.

-Victor Reklaitis