Oil Prices Surge Amid Tensions with Iran

Oil prices experienced a significant increase of 3% on Thursday following a statement from President Donald Trump, in which he threatened to impose ‘economic warfare’ against countries working with Iran.

Source: cdnph.upi.com

The US President took to social media to announce that he had offered Iran an opportunity to make an agreement with the United States, which was unfortunately turned down. In response, Trump vowed to unleash ‘tremendous economic consequences’ against any nation collaborating with Iran.

He wrote, ‘TRAGICALLY, for them, they have failed to take it. Therefore, today, I am announcing the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY! This will be Economic Warfare and Isolation on an unprecedented scale.’

However, Trump failed to provide clarity on which countries he would be targeting or what specific economic actions he plans to take.

Oil Market Reacts to Trump’s Threats

Following Trump’s statement, oil futures for Brent crude oil rose by 2.9% to $94.31 per barrel early on Thursday. Meanwhile, West Texas Intermediate, the US benchmark, jumped by 3.3% per barrel to $88.67 for September futures.

The ongoing naval blockade by the US on the Strait of Hormuz and Iran’s attacks on the strait continue to disrupt the world oil market. The strait is a vital shipping route for Middle East oil, with millions of barrels of oil and over 100 vessels passing through it each day under normal circumstances.

On Wednesday, a mere 12 ships traveled on the strait, according to a report by Kpler, a maritime data firm.

The pressure on the oil trade is also being felt in the United Arab Emirates, which announced on Wednesday that it would be halting all trade with Iran due to suffering attacks from the Islamic Republic on Tuesday.

The UAE claimed that Iran launched two ballistic missiles towards it, although Iran denies the allegations.

This latest development adds to the growing tensions between the US and Iran, with the situation in the Middle East continuing to unfold.