Oil Prices Rise on New U.S. Pressure Against Iran

Oil prices moved more than $2 per barrel higher Thursday, with renewed tension around Iran and the Strait of Hormuz putting supply risks back in focus. The move came ahead of the September 2026 Nymex WTI futures contract expiration and followed President Trump’s warning that the U.S. could significantly expand economic pressure on Iran and countries that continue supporting it.

Trump threatened Iran with what he called “economic warfare and isolation on an unprecedented scale,” warning that countries allowing financial institutions, businesses, airports or government entities to provide support to Iran could face significant economic consequences. The administration did not provide details on what those measures could include or identify specific countries that might be targeted.

Before the war began in February, roughly one-fifth of globally traded oil moved through the Strait of Hormuz. Two ceasefire agreements intended to restore shipping through the Strait have since fallen apart, leaving the market sensitive to developments involving Iran and regional trade flows.

China pushed back against the latest U.S. pressure. Chinese Foreign Ministry spokesperson Lin Jian said sanctions and pressure would not resolve the situation and called for a diplomatic and political solution. China is particularly important to the discussion because it buys more than 80% of Iran’s shipped oil, based on 2025 Kpler data.

Shipping risks are also extending beyond Hormuz. UK Maritime Trade Operations reported that a tanker was boarded and redirected off the coast of Yemen in the Gulf of Aden, another reminder that vessels moving through the region continue to face security concerns.

Despite those risks, some crude flows are showing signs of improvement. Chinese refiners purchased at least 8 million barrels of Iraqi crude for prompt delivery while more barrels exited the Strait of Hormuz. U.S. crude sales to Asia for September delivery also increased to 36 million barrels, up 64% from the previous month. That remains below the 60 million barrels exported to Asia in April, but the increase shows buyers continuing to adjust supply sources amid disruptions in the Middle East.

There are also indications that the CPC export terminal in the Black Sea could be resuming some loading activity. Oil tankers have begun arriving at the facility following repeated disruptions last month caused by attacks on vessels at the terminal. A recovery there could help restore some crude availability, although the broader supply environment remains uncertain.

Russia’s refining sector continues to face pressure. Average crude processing fell below 3.9 million barrels per day during the week ending August 12, down from roughly 4 million to 4.1 million barrels per day in July. Continued strikes on Russian refining facilities have reduced processing rates even though several previously damaged plants have returned to operation.

U.S. inventory data offered a mixed picture. The EIA reported a 4.4-million-barrel increase in crude inventories for the week ending August 14, while stocks at Cushing declined by 1.3 million barrels. Gasoline inventories increased by 700,000 barrels, while distillate inventories fell by 1.5 million barrels.

The inventory levels provide additional context for fuel markets. U.S. crude inventories are currently in line with the five-year average for this time of year, but gasoline stocks are about 5% below their five-year average. Distillate inventories remain considerably tighter at approximately 13% below the five-year average.

For energy markets, the latest price move reflects the continuing tension between geopolitical risk and signs that some supply channels are improving. More barrels are reaching buyers through certain routes, and U.S. exports to Asia are increasing, but disruptions surrounding Iran, regional shipping and Russian refining continue to limit confidence in a sustained improvement in supply. With the U.S. now threatening broader economic measures against Iran and countries that support it, geopolitical developments are likely to remain a major driver of oil prices.