Oil prices climb after Trump’s threat of ‘economic warfare’ against Iran

Ships are anchored in the Strait of Hormuz off the coast of Bandar Abbas, Iran, on August 10.

Tehran and Washington are doubling down on competing claims of control over the Strait of Hormuz, as US President Donald Trump steps up his pressure campaign on Iran’s economy.

But the reality of who wields influence in the waterway is more nuanced than either side is willing to admit. Shipping traffic remains severely restricted, demonstrating that many shipowners are not willing to risk a possible Iranian attack and underscoring Tehran’s ongoing leverage over Hormuz.

Even when accounting for so-called “dark” transits by vessels trying to avoid detection, only about two to three Very Large Crude Carriers, or VLCCs, have transited the strait every day since July 7 on average, according to Kpler, which tracks ships using transponders and satellite data. That compares with roughly eight VLCC transits daily before the war.

Yet, notwithstanding the drop in transits, increasing volumes of oil are bypassing the strait altogether or relying on US protection and ship-to-ship transfers to move oil covertly out of the Persian Gulf.

Analysts are divided on which side has more control. Dimitris Maniatis, the CEO of Marisks, a maritime security firm based in Greece, says Iran “exerts near full control” through the “threat of attack.” He told CNN that Iran is likely turning a blind eye to some transits, which in many cases involve tankers ultimately owned by Iranian, Russian, Chinese or Turkish interests.

On the other hand, US Energy Secretary Chris Wright has said America’s ability to escort ships out of the region is only growing, noting that oil flows are higher than tracking services suggest.

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Palestinian civilians gather near an Iranian missile embedded in the ground in Hares, West Bank, on March 24.

Iran’s Islamic Revolutionary Guard Corps (IRGC) warned it could deploy more “destructive” weapons if the war restarts, Iranian media said today, after US President Donald Trump said he had paused US talks with Tehran.

An IRGC spokesperson threatened that if the conflict resumes, “the weapons we use will be completely different from the past in every respect,” according to Iran’s semi-official Tasnim news agency.

Trump said Wednesday the situation with Iran is “good,” as he’s paused US negotiations with the country. “Right now, I think the situation is so good,” Trump told reporters, suggesting talks could start again “at some point.”

CNN’s Alejandra Jaramillo contributed reporting.

A tanker in the Gulf of Aden has been boarded by six armed persons and is being redirected to Somalia, according to a report made to the UK Maritime Trade Operations (UKMTO) center.

The Royal Navy-affiliated UKMTO, which monitors maritime security in the region, said earlier Thursday a ship had broadcast a distress call after being approached by an “unauthorised vessel” 136 nautical miles (around 156 miles) east of Yemen’s port city of Mukalla.

In a later update, the maritime agency said it had received confirmation that the tanker was boarded by six armed persons, who are now “in control of the vessel and redirecting to Somalia.”

UKMTO did not name the vessels involved or state which group is behind the hijacking, but Somali pirates are known to be profiting from the Iran war as commercial ships, avoiding conflict routes through lengthy detours around Africa, sail into their strike zone.

Maritime intelligence group Marisks said the apparent redirection of the vessel “strongly indicates a piracy-related hijacking” and demonstrates the “significant resurgence of piracy and armed maritime activity across the Gulf of Aden and wider Somali basin.”

Clashes have also ramped up in the Red Sea and Gulf of Aden in recent weeks after the Iran-backed Houthis declared a blockade on ships from Saudi Arabia, the main backer of Yemeni government forces.

On Wednesday, the militant group claimed to have targeted eight Saudi oil tankers since late July – when the blockade was declared – including three in the Gulf of Aden and the Arabian Sea, the Houthi-run Saba news agency said.

CNN’s Farida Elsebai and Eleni Giokos contributed reporting.

Export oil pipelines at an oil facility on Kharg Island, Iran, on February 23, 2016.

Iran, already drained by years of sanctions and grappling with the strains of war, now confronts yet another test as President Donald Trump threatens to further tighten the economic screws on the Islamic Republic.

Trump announced Wednesday that the US would exert more financial pressure on Iran as a deal to end the war remains at an impasse. Yet unless his administration uncovers fresh methods to quickly choke off Tehran’s revenue streams, it will once again encounter a regime practiced in sanction evasion and resourceful in finding new ways to generate income as it bets on its ability to outlast Washington in economic endurance.

For decades, the Iranian government has expanded domestic production while operating a complex network of front companies to procure essential goods, largely from China, for its 92-million-strong population. At the same time, it has come up with new ways to export oil, using fleets of sanctioned “dark” tankers that switch off their trackers to deliver cargoes to other ships and ultimately to Beijing, its principal customer.

This week President Masoud Pezeshkian said that Iran’s economic difficulties “have multiplied several times over” and that its “revenue has declined.” Even so, the country has managed to keep fuel and food flowing to a hard-pressed population throughout six months of war with the US.

Foreign Minister Abbas Araghchi dismissed Trump’s approach as little more than “doubling down” on “failed policies,” while contrasting that Washington itself is wrestling with “unprecedented debt” and “surging interest costs.”

“The problem is not that economic pressure has no effect. It clearly does,” Danny Citrinowicz, the former head of the Iran branch of Israel’s military intelligence said on X. The “problem is assuming that economic pain will necessarily produce Iranian capitulation before it produces Iranian escalation.”

Damage can be seen at Abu al-Duhur airbase following eight Israeli airstrikes hit the base in northwestern Syria early on Tuesday.

Turkey’s Defense Ministry called on Israel to end its “reckless attacks” after Prime Minister Benjamin Netanyahu defended an Israeli strike on a military air base in Syria.

Defending the strike, Netanyahu alleged on Wednesday that Turkey — a NATO ally of the US that is one of Israel’s top regional adversaries — was intent on deploying forces there.

In response, Turkey’s Defense Ministry said Thursday there was no Turkish military delegation at the Syrian air base before or during Israel’s attack.

The defense ministry added that it was “essential” that Israel stops “such reckless attacks and fulfills the requirements of international law.”

Netanyahu acknowledged on Tuesday that Israel carried out the strike, which was later criticized by the Trump administration’s Syria envoy, Tom Barrack, as an “unnecessary escalation.”

The Israeli prime minister said Turkey was going to deploy military capabilities to the air base south of Aleppo – a claim Turkey dismissed as “untenable.”

Turkey pointed to the upcoming October elections in Israel as a reason for Netanyahu’s actions, including what it said was his “intent to pursue expansionist and destabilizing policies in the region.”

CNN’s Tal Shalev contributed reporting.

Oil prices jumped more than 2% on Thursday after President Donald Trump threatened “economic warfare” against Iran.

Brent crude futures, the global benchmark, were up 2.4% to almost $94 a barrel early morning ET — its highest level since late July. WTI futures, the US benchmark, rose 2.5% to $86.

Trump warned on Wednesday that the United States would unleash a “crushing economic operation” against Iran, though did not give details. He also threatened to penalize countries doing business with and providing “any type of lifeline” to Iran.

“Oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies — It all needs to stop NOW,” Trump wrote on Truth Social. “You know who you are.”

Tensions escalated this week after the deadline for Washington and Tehran to negotiate a peace deal formally expired on Monday, despite relations having nosedived — and fighting restarted — weeks prior.

While increasing volumes of the oil are finding routes out of the Middle East, the Strait of Hormuz remains effectively closed, keeping energy prices elevated and pushing up global inflation.

On Wednesday, official data from the United Kingdom and euro area showed that consumer price inflation rose by 2.9% in the 12 months to July in both economies, with energy price hikes a contributing factor.

Iran's Foreign Minister Abbas Araghchi attends a press conference at the Iranian embassy in New Delhi, India on May 15.

Iranian Foreign Minister Abbas Araghchi dismissed Donald Trump’s threat to impose “crushing” economic sanctions on the Islamic Republic, calling it a “diversion” and promising the move “will only bring further defeat.”

The US federal debt hit a record $40 trillion on Tuesday, according to the Treasury Department, a grim milestone that leaves the US spending more on interest payments than on national defense and 50% more than on children’s programs.

“Doubling down on failed policies will only bring further defeat – and enmity of Iranians. US economic terrorism threatens global economy and sovereignty worldwide,” Araghchi added.

Also responding to Trump’s move, Iranian Deputy Foreign Minister Kazem Gharibabadi said US decision-making was based on “flawed calculations.”

Gharibabadi said the war has failed to deliver the results the US wanted, so “now they’ve given their next failure a new name: ‘economic war.’”

Global oil prices have remained high since the US and Israel went to war against Iran in February, closing of the Strait of Hormuz. There are growing concerns of a fuel supply crisis as global reserves rapidly decline.

CNN’s Aida Karimi and Billy Stockwell contributed reporting.

Ships are anchored in the Strait of Hormuz, off the coast of Bandar Abbas, Iran, on August 10, 2026.

Global oil prices remain high as US-Iran peace talks stall, with the blockage of the Strait of Hormuz causing a fuel supply crisis, as US President Donald Trump claims that “right now, I think the situation is so good” with Tehran.

Also on Wednesday, Trump took to Truth Social to announce the US would exert more financial pressure on Iran. The president’s latest conflicting string of messaging comes after he told administration envoys earlier this week to halt their conversations with Iran, per a US official.

Here’s the latest on what Trump has said regarding the ongoing war in Iran:

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CNN’s Tal Shalev, Lisa Wong, Alejandra Jaramillo, Billy Stockwell, Mostafa Salem, Molly English, Piper Hudspeth Blackburn and Magdalena Vitores Moreno contributed reporting.

President Donald Trump speaks at General Motors’ Milford Proving Grounds in Milford, Michigan, on July 27, 2026, during a rally in which he repeatedly labeled Democrats as communists.

President Donald Trump announced Wednesday that the US would exert more financial pressure on Iran as a deal to end the war remains at an impasse.

The president did not offer further details about the economic operation or what measures it would entail. He also wrote that there would be economic consequences for any “country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran.”

Earlier on Wednesday, Trump said the “situation” with Iran “was so good,” telling reporters that talks could resume again, “maybe at some point.”

He also answered a question about potential sanctions at an event at the White House. “Well, we have things that we could sanction,” Trump said. “We have very draconian sanctions, and we’ll see what happens.”

Vessels near the Strait of Hormuz, as seen from Musandam, Oman, August 17, 2026. REUTERS/Stringer

The number of US service members wounded since the start of the Iran war has passed 750, according to the Defense Department’s war casualty database.

The Pentagon updated the database on Wednesday, recording more than 50 additional wounded soldiers, as talks between Tehran and DC to end the conflict remain at an impasse.

The Defense Department created the “Overseas Operations” category last month in DCAS for service members killed and wounded “starting July 7.” The Pentagon has yet to provide any additional details or specify the conflict in which the casualties have occurred.

The July 7 date aligns with the day that President Donald Trump’s administration told Congress that a new conflict with Iran had begun in a War Powers Act notification.

CNN has reached out to the Pentagon for additional clarity on the category.

Wednesday’s updated numbers come weeks after the Pentagon drew scrutiny from media outlets and lawmakers after the killed and wounded numbers decreased in DCAS as Iranian attacks continued. Four deaths and dozens of injuries disappeared from the totals last month before being restored.

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