Oil prices jump by more than 2% following Trump's threats of "economic war" against Iran

Oil prices jumped by more than 2%, Thursday, after US President Donald Trump threatened to launch an “economic war” against Iran.

Brent crude futures, the global benchmark for oil prices, rose 2.4% to about $94 a barrel early Thursday morning EST, their highest level since late July. West Texas Intermediate crude futures, the US benchmark, also rose 2.5% to $86 per barrel.

On Wednesday, Trump warned that the United States would launch an “overwhelming economic operation” against Iran, without providing details about it. He also threatened to impose sanctions on countries that do business with Iran or offer it “any kind of lifeline.”

“Oil smuggling, barter lines, cash transfers, exchange offices, ship registries, shell companies - it all has to stop now. You know yourselves,” Trump wrote on the Truth Social platform. “This will be a critical day economically, and we need all of our allies to stand with the United States of America to isolate and defeat the Iranian threat.”

Tensions escalated this week after the deadline officially set for Washington and Tehran to negotiate a peace agreement expired on Monday, although relations between the two sides had deteriorated severely, and fighting resumed weeks ago.

With increasing amounts of oil finding its way out of the Middle East, the Strait of Hormuz remains effectively closed, keeping energy prices high and pushing up global inflation.

Official data released on Wednesday in the United Kingdom and the euro zone showed that consumer price inflation rose by 2.9% during the 12 months to July in both economies, with higher energy prices contributing to this rise.