WTI crude oil futures briefly topped 108 dollars per barrel in New York on Wednesday, reaching the highest level in three weeks.
The increase came amid fears that the Strait of Hormuz will remain closed as negotiations between the United States and Iran to end their conflict are stalled.
In London, Brent crude futures rose above 120 dollars per barrel at one point.
US President Donald Trump wrote on social media on Wednesday: “Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon!” alongside an image with the caption “NO MORE MR. NICE GUY!”
Iranian state-run television quoted a high-ranking security source as saying a “punishing response” will be necessary if the US continues its “illegal naval blockade” around the Strait of Hormuz.
Market sources say investors had been expecting that negotiations on ending the conflict would advance and the Strait of Hormuz would be opened soon, but that their outlook is becoming increasingly pessimistic as the stalemate continues.