Oil surged on Wednesday after President Donald Trump said America’s Memorandum of Understanding with Iran was “over” and threatened a new volley of attacks on the country tonight.
Brent crude, the international benchmark, rose 5.4%, the biggest single-day gain for oil since April 29. Oil rose above $80 a barrel for the first time since June 19 and settled at $78.02. US oil gained 4.6% to just under $74.
Although the United States and Iran have been exchanging fire and some oil tankers have been struck in drone attacks over the past few days, oil continues to flow out of the Strait of Hormuz. However, Trump said at a NATO summit in Turkey that he may reimpose a US naval blockade of the strait to prevent Iranian oil from exiting.
Iran was able to get 60 million barrels of oil through the strait since Trump signed the MOU on June 18, according to Lipow Oil Associates. Most of that oil remains unsold, and the US Treasury reimposed sanctions on Iranian oil Tuesday.
Trump also said the United States may attack Iran’s critical infrastructure again tonight.
“It may be a big attack, and it’ll knock out a lot of stuff,” Trump said, saying the US could hit electrical plants. “We’ll take them out. I don’t want to do that, but if we have to, we’ll take them out.”
Gasoline futures gained 5.3% Wednesday to $3.11, the highest price since June 3. It was gasoline’s biggest gain since April 2.
Diesel surged by more than 11% to $3.67 after Russia said it would halt diesel exports after Ukraine attacked several Russian refineries.
