Oil prices fell more than 3% on Tuesday, after the New York Times reported the State Department plans to return evacuated diplomats to the Middle East, in a sign the U.S. does not expect a return to full-scale war.

Brent crude oil futures were last seen trading 3.4% lower at $89.05 per barrel, its lowest since Aug. 13. U.S. West Texas Intermediate crude fell 3.6% to trade around $81.99 a barrel.

Tuesday’s moves extended declines from Monday, when Brent fell by 3%.

While U.S. strikes in the Middle East have quieted in recent weeks, Washington has instead made moves to exert huge economic pressure on Iran.

The U.S. government unveiled a fresh raft of sanctions on Iran this week, as well as 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.