Oil Hits Three-Week High; Trump’s Threats Raise Supply Risks
Oil prices strengthened again during Thursday's trading (Aug 20), reaching their highest level in over three weeks after US President Donald Trump threatened to expand pressure on nations continuing to assist Iran. Brent crude rose approximately 2.1% to US$93.56 per barrel, while September WTI gained 2.5% to reach US$88.01 per barrel—its highest level since July 24.
Trump had previously threatened to wage large-scale "economic warfare and isolation" against Tehran. He also warned that any country or entity providing economic aid to Iran could face consequences from Washington. US Treasury Secretary Scott Bessent is scheduled to provide further details regarding these measures on Monday.
These tensions have heightened concerns regarding energy supplies from the Middle East. The conflict—ongoing for nearly six months following US and Israeli military strikes on Iran—has caused significant disruptions to the region's oil and gas distribution routes.
The Strait of Hormuz remains a focal point. Iran's blockade of this strategic waterway, alongside attacks on various Middle Eastern energy facilities, has hindered oil shipments to global markets. Prior to the conflict, Hormuz was one of the most critical routes for global energy exports.
UBS assesses that heightened tensions leave the door open for further supply disruptions. A decline in oil exports from the Middle East is seen as tightening market conditions once again, thereby sustaining the geopolitical risk premium in oil prices.
Newsmaker Analysis: The bias for oil remains bullish as long as threats of new sanctions and Middle East supply disruptions persist. Brent holding above US$93 opens the possibility of re-testing the US$94–US$95 range. However, following a multi-session rally, the potential for profit-taking warrants caution. The market's next focus is on the details of US economic policy toward Iran to be announced by Bessent, as more aggressive measures could further inflate the oil risk premium.
Source: Newsmaker.id
