Oil prices extended their rally on Thursday, climbing to their highest levels in almost a month as renewed U.S. economic threats against Iran reinforced concerns that disruption around the Strait of Hormuz could continue.
Brent crude futures climbed 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.
The gains marked a fifth consecutive positive session for crude, taking both benchmarks to their strongest levels since July 24. Traders remain focused on the risk that restricted movements through the strategically important waterway will continue to limit energy supplies from the Middle East.
Trump signals tougher campaign against Tehran
Fresh geopolitical support for oil prices emerged after U.S. President Donald Trump threatened another escalation in Washington’s economic campaign against Iran.
“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.
Trump stopped short of outlining the specific sanctions or restrictions Washington intends to introduce. However, he called on U.S. allies to participate and warned that companies or other entities maintaining commercial ties with Iran could also face economic penalties.
ING analysts described the announcement as pointing towards a “further escalation in U.S. efforts to isolate Iran.”
Iran is already subject to extensive U.S. sanctions targeting its oil exports, while Washington has maintained a naval blockade affecting Iranian ports.
Restricted Hormuz traffic supports crude prices
The continued disruption of shipping through the Strait of Hormuz remains the central concern for energy traders.
Iran effectively restricted the strategic passage in response to U.S. military action, disrupting a route that normally handles approximately 20% of global oil and liquefied natural gas supplies.
Ship-tracking data indicates that commercial traffic through the waterway remains dramatically below pre-war levels, despite U.S. officials repeatedly maintaining that Hormuz is open to tanker movements.
The discrepancy between official claims and observed shipping activity has kept uncertainty elevated, with traders increasingly considering the possibility that constrained flows could persist.
That prospect has helped maintain a sizeable geopolitical risk premium in crude markets and supported the latest five-session advance.
Little progress towards renewed U.S.-Iran talks
Prospects for a diplomatic resolution also remain uncertain. Trump said on Wednesday that the United States had full control of the Strait of Hormuz and suggested negotiations with Iran could restart “at some point.”
Iran has largely denied that meaningful discussions with Washington are currently underway.
Tehran maintains that the U.S. must first satisfy conditions contained in the framework peace agreement reached in June before progress can be made towards fully reopening the strait.
The interim Memorandum of Understanding expired earlier this week, and neither Washington nor Tehran has provided a strong indication that an extension is imminent.
With diplomatic progress limited and commercial shipping still heavily constrained, the market continues to price in the possibility of prolonged disruption to Middle Eastern energy flows.
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