Oil kept rising on Wednesday as the Strait of Hormuz remains closed, preventing the passage of almost a fifth of the world's energy while hostilities between the U.S. and Iran continue.
Both Brent oil and West Texas Intermediate soared more than 5%. The former got close to $117 at 11:07 a.m. and has now increased over 94% since the beginning of the year. The latter topped $105.
The sustained increase accelerated after a report by The Wall Street Journal claiming that President Donald Trump told officials to prepare for an extended blockade of Iranian ports.
The outlet noted that Trump appears to have decided to continue inflicting economic pain on Tehran to bring the country back to the negotiating table. It went on to detail that Trump has concluded that returning to active combat carries significant risk compared to the current scenario. He won't drop the demand that Tehran suspends uranium enrichment for at least 20 years and accept further restrictions.
Trump also issued a warning to Iran on Wednesday, saying Tehran should "better get smart soon" as negotiations between the countries continue to be deadlocked and the Strait of Hormuz closed.
In a social media publication, Trump said "Iran can't get their act together" and authorities "don't know how to sign a nonnuclear deal."
"They better get smart soon! President DJT," he added, posting an image of him holding a rifle and the caption "NO MORE MR. NICE GUY!" against a backdrop of what appear to be military bases enduring explosions.
Iran appears to be feeling economic pain. Its currency plunged to a record low on Wednesday, with the rial hitting 1.8 million per U.S. dollar.
ABC News detailed that the currency had remained largely stable in the early weeks of the war because there was little trading or imports. However, that changed this week.
The rial's depreciation was one of the main causes for country-wide protests earlier this year, which led to substantial repression and the killing of thousands. Back then, the rial slid from 1.4 million to 1.6 million per U.S. dollar in less than a week, fueling fears about further inflation.
In this context, another report noted that millions of Iranians are now closer to unemployment and poverty as a result of the economic impact of the war.
An extensive CNN report detailed layoffs and unpaid leave across refineries, textiles, trucking, aviation, and journalism. Iran's deputy work and social security minister, Gholamhossein Mohammadi, said the war has directly cost about 1 million jobs.
Iranian publication Etemad Online estimated another 1 million people have been pushed out of work through spillover effects.
