Crude futures settled higher in after-hours trading on Thursday as President Trump's threat to crush the Iranian economy further clouded the prospect of a deal to end the Middle East conflict.
Front-month West Texas Intermediate crude futures advanced by 2.7% to $88.15 per barrel, while Brent futures gained 1.8% to $93.22/bbl.
Gelber & Associates said that with the US and Iran showing little progress toward an agreement, restricted shipping and elevated insurance costs are keeping a sizable geopolitical premium.
The US Treasury Department on Thursday sanctioned three individuals over links to Iran's Islamic Revolutionary Guard Corps-Qods Force and Hezbollah, as part of a broader sanctions package.
The US Treasury's Office of Foreign Assets Control alleged that the network used couriers traveling on commercial airline flights between Lebanon, Turkiye, the UAE, and Iran to move up to hundreds of millions of dollars between jurisdictions.
The blacklisting comes after Trump warned Wednesday of potential "economic warfare" against Iran in a Truth Social post, while Treasury Secretary Scott Bessent reportedly said that he plans to detail the new sanctions Monday.
Soojin Kim, research analyst at MUFG, said that the move marks a continued shift from military action toward economic pressure, aimed at forcing Iran back into negotiations over the war, its nuclear program and the Hormuz.
The US president 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.
He said oil smuggling, currency swap lines, cash transfers, exchange houses, ship registries and front companies were channels he wants shut down immediately, emphasizing that Iran will never be permitted to acquire a nuclear weapon.
However, Iran pushed back against Trump's claim that the country is on the brink of economic collapse, with Iranian Foreign Minister Abbas Araqchi calling the US President's comments an attempt to divert American public opinion from domestic problems, including record debt and rising interest rates.
Trump's Economic D-Day announcement 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.
RBC Capital Markets strategists said that crude prices have been whipsawed by both sentiment around the Iran conflict and the reality on the water, but paper markets have best reflected the sentiment of those actively trading the market rather than overall market sentiment.
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.