Oil prices rose on Aug. 20 as investors assessed the risk that the deadlock in efforts to end the U.S.–Israeli war against Iran could continue to disrupt energy supplies from the Middle East, one of the world’s most important oil-producing regions.
Brent crude futures for October delivery rose $1.20, or 1.3 percent, to $92.82 a barrel by 4:13 a.m. ET, while U.S. West Texas Intermediate crude futures for September added 92 cents to $86.75 a barrel. The more-active October WTI contract was up $1.13, or 1.3 percent, to $85.52.
Both Brent and WTI benchmarks hit their highest levels since late July during the session, gaining for a fifth straight session and having settled on Wednesday at their highest since July 24. The September WTI contract expires later on Thursday.
Much of the market’s attention remains focused on the Strait of Hormuz, one of the world’s most important shipping lanes for crude oil and fuel exports. Before the war began on Feb. 28, shipments moving through the strait accounted for about one-fifth of global oil consumption.
Ship movements through the region’s two main energy chokepoints remained subdued, according to ship-tracking company Kpler.
Nine commodity vessels passed through the Strait of Hormuz on Aug. 19, unchanged from a day earlier, while traffic through the Bab el-Mandeb Strait, which links the Red Sea with the Gulf of Aden, fell to 27 commodity vessels from 32.
Kpler said some ships may not appear in the figures because they transit with their tracking transponders switched off.
U.S. President Donald Trump said on Aug. 18 there were no negotiations taking place with Iran and maintained that the Strait of Hormuz was open. Iran disputed that claim, saying the strategic waterway remained closed.
The prolonged disruption has reduced the amount of crude reaching refineries, tightening supplies of refined fuels such as diesel and heating oil.
The U.S. Energy Information Administration said on Aug. 19 that U.S. inventories of distillate fuel, which include diesel and heating oil, fell for a third consecutive week.
Gas and diesel prices are displayed at a Chevron gas station in Fort Stockton, Texas, on Aug. 14, 2026. Brandon Bell/Getty Images
Crude oil inventories unexpectedly increased by 4.4 million barrels during the week ending Aug. 14, compared with analysts’ expectations for a 600,000-barrel decline.
Pressure on Iran
Regional tensions intensified further after the United Arab Emirates suspended all financial and economic transactions with Iran until further notice.
The move by the UAE to sever commercial ties came after its defense ministry said that it had detected two ballistic missiles launched from Iran.
In a statement, the ministry said the missiles targeted “maritime traffic” based on its assessments. Both missiles fell into the sea, it said.
Iran’s foreign ministry rejected the statement by the UAE that its missiles targeted maritime traffic, describing it as “baseless.”
A ship sails off the coast of Ajman, United Arab Emirates, on July 10, 2026. AFP via Getty Images
Trump said on Aug. 19 that the United States would launch what he described as an unprecedented campaign of economic pressure against Iran after diplomacy failed to produce a breakthrough.
“No one has given the Islamic Republic of Iran a greater opportunity to make a Deal than me. TRAGICALLY, for them, they have failed to take it,” Trump wrote in a post on Truth Social.
“Therefore, today, I am announcing the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY!”
Trump said the campaign would amount to “Economic Warfare and Isolation on an unprecedented scale.”
He warned that any country allowing its banks, companies, airports, or government agencies to provide what he described as “any type of lifeline to Iran” would face severe economic consequences from the United States.
A sculpture overlooking the Strait of Hormuz along the seafront in the port city of Bandar Abbas, in southern Iran, on Aug. 10, 2026. Atta Kenare/AFP via Getty Images
The U.S. president said activities including oil smuggling, financial transfers, swap lines, exchange houses, ship registries, and front companies would become targets of U.S. enforcement efforts.
Although Trump did not name any countries, he said those involved “know who you are.”
The latest measures reflect a strategy that administration officials have discussed publicly for several weeks.
U.S. Treasury Secretary Scott Bessent testifies before the Senate Committee on Appropriations in Washington on June 3, 2026. Madalina Kilroy/The Epoch Times
U.S. Treasury Secretary Scott Bessent said during an interview on Newsmax’s “Rob Schmitt Tonight” on Aug. 19 that Trump had instructed the Treasury Department to intensify economic pressure on Tehran.
Bessent said the administration planned to combine broad financial restrictions with the continued blockade around Iranian ports.
Reuters and Joseph Lord contributed to this report.
