Brent crude crosses $92 as oil rises for 5th session
What's the story
Oil prices have surged for the fifth consecutive session, with Brent crude, the global oil benchmark, crossing $92 a barrel. The spike comes after US President Donald Trump announced new measures to cripple Iran's economy. West Texas Intermediate (WTI) crude for October delivery was also trading near 86 dollars per barrel, at the time of writing.
Economic warfare
Trump's warning to US allies
Trump has described the new measures as "Economic Warfare and Isolation on an unprecedented scale," calling them an "ECONOMIC D-DAY."
He has urged all US allies to back Washington.
The President warned that countries permitting financial institutions, companies, airports or government bodies to assist Iran would face severe economic repercussions.
However, he did not elaborate on what those penalties would entail.
Market impact
Impact on crude oil prices
Crude oil prices have skyrocketed this year as tensions between Washington and Tehran have intensified, especially around the Strait of Hormuz.
The US administration's latest move to pressure Iran could further complicate relations with countries buying Iranian crude, especially China, its biggest market.
Despite these tensions, some crude is still being covertly transported through the Strait of Hormuz, as per media reports.
Regional dynamics
UAE cuts economic ties with Iran
Trump's announcement comes a day after the United Arab Emirates (UAE) severed economic ties with Tehran, accusing it of firing ballistic missiles at its territory.
The UAE is a major financial and commercial hub for Iranian businesses and individuals.
The move is expected to deepen Iran's regional economic isolation amid a severe domestic crisis, with headline year-on-year inflation exceeding 80% and food inflation reaching 140%.