Crude futures gained in after-hours trading on Thursday, extending a four-day run of gains, as an escalating Middle East crisis and President Trump's threat to crush the Iranian economy stoked fears of prolonged supply disruptions.
Brent crude futures climbed 2.2% to $93.66 per barrel, while Murban crude futures were up 1.6% to $100.99/bbl.
On Wednesday, Trump said that the US will launch what he called the "most crushing economic operation ever taken against any country" against Iran, threatening severe financial penalties on any nation that helps Tehran evade sanctions.
"No one has given the Islamic Republic of Iran a greater opportunity to make a deal than me," the US president said, adding that Iran had failed to take it.
Trump said any country whose financial institutions, businesses, airports, or government entities offer Iran a "lifeline" will face what he described as tremendous economic consequences of their own.
The US president said oil smuggling, currency swap lines, cash transfers, exchange houses, ship registries and front companies are channels he wants shut down immediately, emphasizing that Iran will never be permitted to acquire a nuclear weapon.
ING strategists said that Trump warned of tougher economic penalties for entities supporting Iranian economic activities, signaling a further escalation in US efforts to isolate Iran.
However, Iran pushed back against Trump's claim that the country is on the brink of economic collapse. Iranian Foreign Minister Abbas Araghchi called the US President's comments an attempt to divert American public opinion from domestic problems, including record debt and rising interest rates.
The announcement by Trump comes after the UAE said Wednesday it was halting all trade and financial transactions with Iran after the Gulf state accused Tehran of firing ballistic missiles at its territory, ramping up regional tensions.
Meanwhile, Yemen's Houthis said on Thursday that they carried out two drone attacks on Saudi Arabia, targeting a sensitive target at Najran airport and an Aramco facility in Najran.
Further risks to energy supplies continue to mount, with UK Maritime Trade Operations saying a tanker was hijacked 136 nautical miles east of Mukalla, Yemen, by six armed persons who took control of the vessel and are redirecting it toward Somalia.
Meanwhile, Ukraine also continues to hit major refineries in Russia, attacks that have tightened global diesel supplies.
Kyiv attacked the Taneco oil-processing facility in Russia's Tatarstan region, causing a fire at the plant, the General Staff in Kyiv said in a Telegram statement.
Soojin Kim, research analyst at MUFG, said that physical oil markets remain tight, with Brent maintaining strong backwardation and US distillate inventories declining despite higher crude stocks.