Brent Tops $93 as the US-Iran Impasse Deepens

Brent crude surpassed $93 per barrel on Thursday, August 20, reaching a three-week high on the back of a fresh US economic pressure campaign against Iran. The European benchmark reached $93.48 at the European open, up 1.95%, according to OilPrice; EFE reported $93.5, its highest level in nearly a month.

The move extends the rally to five consecutive sessions. Trump announced what he described as an economic war and an unprecedented-scale isolation of Iran, warning of severe consequences for any country that offers financial, currency, or vessel-registration support to Tehran, according to CNBC. The United Arab Emirates suspended trade and financial transactions with Iran after alleging missile strikes on its territory, which Tehran denied. The memorandum of understanding signed on June 17 expired on Monday, August 17, without a peace agreement, Al Jazeera reported. For Mexico, the rally translates into higher costs for the gasoline and diesel it imports, primarily from the US Gulf, and affects the reference price of the Mexican Mix, Pemex's export crude.

Analysts attribute the rally to refining stress: the diesel crack spread in the United States exceeded $100 per barrel for the first time, reaching $102 on Monday, according to OilPrice. Ole Hansen, Head of Commodity Strategy at Saxo Bank, wrote that crude is available but diesel is not, and that the real stress sits in the refining chain. Flows through the Strait of Hormuz, through which around one-fifth of global crude transits, remain well below pre-conflict levels: Kpler counted 6.1 million barrels per day during the memorandum window, compared with 2.3 million between April and June, and analysts expect further declines given the impasse, according to Al Jazeera.

Attention will focus on diesel crack spreads and on whether other countries follow the UAE in suspending trade with Iran, two signals that will determine how long the rally lasts and how far it feeds through to fuel prices across the region.

This article was written with artificial intelligence assistance based on verified sources and reviewed by a human editor before publication.