Oil jumps after Trump warns Iran with grave 'consequences'

Thomson Reuters

Iranian President Hassan Rouhani attends a meeting with Muslim leaders and scholars in Hyderabad

• Oil prices jumped nearly 2% early Monday.
• President Donald Trump warned Iranian President Hassan Rouhani late Sunday with "CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE" after the Iranian leader said a US-Iran conflict would be the "mother of all wars."
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Oil prices rose Monday after President Donald Trump delivered Iranian President Hassan Rouhani a frenzied threat on Twitter, promising in all-caps that Iran would suffer grave "consequences" if it continued to threaten the US.

West Texas Intermediate rose 1.9% to $68.95 per barrel. Brent, the international benchmark, was up 1.4% to $74 a barrel.

Rouhani warned in a speech in Tehran on Sunday that a conflict with Iran would be the "mother of all wars" and that the US would "regret it" if it didn't stop escalating tensions with the country, prompting a response from Trump.

"To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE," the president tweeted late Sunday. "WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!"

Trump in May withdrew the US from the Iran nuclear deal, which eased sanctions on the Islamic Republic in exchange for restraints on its nuclear weapons program. As part of that move, the Trump administration last month said all countries must stop importing Iranian oil by November or face sanctions.

The Trump administration has since seemed to soften its stance, with Treasury Secretary Steve Mnuchin and Secretary of State Mike Pompeo saying in recent weeks that sanction waivers may be offered to some countries.

Rouhani warned earlier this month he might disrupt oil shipments in neighboring countries if the US follows through with its sanctions on Iranian barrels.

Brent is up 50% year-over year.

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