Oil prices rose sharply on Thursday, reaching their highest levels in almost a month as fresh threats of U.S. economic action against Iran added to fears that the impasse over the Strait of Hormuz could persist.
Benchmark Brent crude futures gained 2.1% to $93.57 a barrel by 04:43 ET (08:43 GMT), while U.S. West Texas Intermediate futures advanced 2.0% to $87.56 a barrel.
Crude has now risen for five consecutive sessions, with prices climbing to their strongest levels since July 24 as traders continue to price in the risk of prolonged disruption to one of the world’s most important energy shipping routes.
Trump threatens tougher economic measures against Iran
Markets reacted after U.S. President Donald Trump said Washington would impose stricter economic restrictions on Iran as tensions between the two countries remain unresolved.
“I am announcing the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY! This will be Economic Warfare and Isolation on an unprecedented scale,” Trump said in a social media post.
The president did not provide details of the planned measures but urged U.S. allies to participate and warned that entities continuing to conduct business with Iran could also face penalties.
Analysts at ING interpreted the comments as pointing to a “further escalation in U.S. efforts to isolate Iran.”
Iran is already subject to U.S. restrictions on its oil exports, while Washington has also maintained a naval blockade on Iranian ports.
Hormuz disruption keeps supply fears elevated
The broader oil-market concern remains the disruption to traffic through the Strait of Hormuz, which Iran effectively blocked in response to U.S. military pressure.
The waterway normally handles around 20% of global oil and liquefied natural gas supplies, making even a partial interruption highly significant for energy markets.
Recent shipping data indicates that commercial movements through the strait remain only a fraction of pre-war levels, despite repeated statements from U.S. officials that the route remains open to tanker traffic.
The limited flow of vessels has kept traders focused on the possibility that supply disruptions could last longer than initially expected, supporting a sustained geopolitical premium in crude prices.
U.S. and Iran remain far apart on negotiations
Trump reiterated on Wednesday that the U.S. maintained full control over the Strait of Hormuz and said talks with Tehran could resume “at some point.”
Iran has largely rejected suggestions that active negotiations are taking place and has insisted that Washington first meet the conditions contained in a framework peace agreement signed in June.
The interim Memorandum of Understanding expired earlier this week, with little indication from either side that it is close to being extended.
With no clear diplomatic breakthrough in sight and commercial traffic still heavily restricted, traders remain wary that the current standoff could continue to support elevated oil prices.