Oil settles up more than 2% after Trump threatens countries supporting Iran

Oil prices surged more than 2% on Thursday (Aug 20) to reach their highest level in nearly a month, as US President Donald Trump threatened retaliation against nations supporting Iran. Brent crude futures climbed US$2.16, or 2.4%, to US$93.78 a barrel, while US West Texas Intermediate crude futures for September rose US$2, or 2.3%, to US$87.83 a barrel, both the highest since July 24.

US Treasury Secretary Scott Bessent announced a press conference on Monday to discuss potential actions. Prior to the Iran war, shipping traffic through the Strait of Hormuz, a crucial chokepoint for global oil supply, averaged about one-fifth of pre-war levels. The United Arab Emirates recently suspended all financial and economic transactions with Iran, reflecting the strained relationships between Gulf Arab oil producers and Tehran.

The conflict, which began on Feb 28 with US and Israeli military strikes on Iran, has resulted in thousands of casualties and significantly disrupted the flow of oil and gas to other countries. Despite the threats from the US, oil trading advisors suggest that Iran's control of the Strait of Hormuz remains a key leverage for the country, and a major decline in oil prices seems unlikely at present.