Brent crude rose 2.1% to $93.57 a barrel and WTI advanced 2.0% to $87.56 on Thursday, the highest levels for both benchmarks since July 24. President Trump threatened new economic sanctions on Iran as the two countries stayed locked in a standoff over the Strait of Hormuz.
Prices extend a five-day rally
Oil climbed for a fifth straight session after Trump said Washington will impose stricter economic restrictions against Iran. Brent futures touched $93.57 a barrel by 04:43 ET, while WTI crude reached $87.56.
Trump calls for allies to join
Trump did not detail what the new sanctions would entail, but he called on U.S. allies to join the effort and warned that entities doing business with Iran would also face penalties. According to Investing.com: "I am announcing the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY!" Analysts at ING read the warning to third parties as a further escalation of Washington's push to isolate Tehran.
Iran is already under U.S. sanctions on its crude oil exports, and Washington has kept a naval blockade on Iranian ports. Iran, in turn, has effectively blocked the Strait of Hormuz, disrupting around 20% of the world's oil and liquefied natural gas supplies.
Shipping data shows the strait choked off
Recent shipping data show commercial traffic through the strait has slowed to a fraction of pre-war levels, despite repeated claims from U.S. officials that the waterway remains open to tankers. Trump reiterated on Wednesday that the U.S. holds full control of the strait and that talks with Iran could resume at some point.
Iran has largely denied that any dialogue with Washington is currently under way. Tehran wants the U.S. to fulfil the conditions of a framework peace deal signed in June before it will discuss unblocking the strait. That memorandum of understanding lapsed earlier this week, with little sign from either side that it will be renewed.
Source: Commodities & Futures News
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