Oil prices jump 3% as Trump threatens ‘economic warfare’

Aug. 20 (UPI) -- Oil prices were up 3% Thursday after President Donald Trump's threat to impose a "crushing economic operation" against Iran.

Trump posted that he offered Iran an opportunity to make an agreement with the United States which it turned down. In retaliation, he vowed "tremendous economic consequences" against any country working with Iran.

"TRAGICALLY, for them, they have failed to take it," Trump wrote about his offer to Iran. "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."

Trump did not clarify what countries he would be targeting or what economic actions he plans to take.

Following the post, oil futures for Brent crude oil increased by 2.9% to $94.31 per barrel early on Thursday. West Texas Intermediate, the U.S. benchmark, jumped by 3.3% per barrel to $88.67 for September futures.

The world oil market continues to be disrupted by the U.S. naval blockade on the Strait of Hormuz and Iran's attacks on the strait. The strait is a key shipping route for Middle East oil, under normal times seeing millions of barrels of oil and more than 100 vessels using it each day.

On Wednesday, 12 ships traveled on the strait, Kpler, a maritime data firm, reports.

Pressure on the oil trade is also coming from the United Arab Emirates, which announced Wednesday it is stopping all trade with Iran due to suffering attacks from the Islamic Republic on Tuesday.

The UAE said Iran launched two ballistic missiles toward it. Iran denies the allegation.

NTT IndyCar Series Drivers Scott Dixon (R) and Graham Rahal (L) pose with first lady Melania Trump during an event in the Rose Garden of the White House on Thursday. The first lady announced that a $2 million donation from IndyCar and Fox Corporation will fund Fostering the Future scholarships at Indiana University and Purdue University to expand academic opportunities for individuals transitioning from foster care. Photo by Bonnie Cash/UPI | License Photo