Oil jumps after Trump warns Iran of grave 'consequences'

Iranian President Hassan Rouhani attends a meeting with Muslim leaders and scholars in Hyderabad, India, February 15, 2018. REUTERS/Danish Siddiqui

Thomson Reuters

• Oil prices jumped nearly 2% early Monday.

• President Donald Trump warned Iranian President Hassan Rouhani late Sunday of "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."

• Watch oil trade in real time here.

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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 a barrel. Brent, the international benchmark, was up 1.4% to $74 a barrel.

Rouhani warned in a speech in the Iranian capital, 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 Iran 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 Steven 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 followed through with its sanctions on Iranian barrels.

Brent is up 50% year-over-year.

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