Brent tops $104 on reports U.S. may resume strikes on Iran before midterm elections

Brent crude rose almost 4% on Thursday to more than $104 per barrel as concerns about the situation in the Middle East flared again. The White House is considering resuming large-scale military operations in Iran in the coming weeks, NBC News reported, citing sources.

December futures for Brent, the international oil benchmark, rose 3.9% to an intraday high of $104.44 per barrel. November futures for U.S. benchmark West Texas Intermediate gained 4% to $92 per barrel.

President Donald Trump and his national security team have discussed possibly resuming large-scale U.S. military operations in Iran in the coming weeks, NBC News reported, citing sources. The options include launching strikes ahead of the November midterm elections, CNBC noted.

The White House has asked the Pentagon to develop options for strikes against Iranian targets that could be carried out before the elections, the Atlantic reports. The scope and targets of any potential operation are still being discussed, and no final decision has been made, according to the outlet.

Meanwhile, a tanker was attacked off Qatar’s northern coast early Thursday. It was the first reported strike on a tanker deep inside the Persian Gulf in about a month, Bloomberg writes. The vessel was hit by projectiles, and casualties were reported, according to the UK Maritime Trade Operations, or UKMTO, whose mission is to provide mariners, shipping companies, and regional authorities with verified and corroborated security information. UKMTO did not identify the tanker or say who was responsible for the attack.

“Looking ahead, crude is likely to remain tied to the security of Gulf export routes and infrastructure,” said Inki Cho, a financial markets consultant at online trading platform Exness. Cho reckons that any escalation affecting traffic through the Strait of Hormuz or Saudi energy infrastructure would threaten physical supply and could push prices even higher.

Rising oil prices are intensifying inflationary pressures after the Fed raised interest rates in September. Money markets put the probability of another increase in October at around 20% and have fully priced in a hike by December, Bloomberg noted.

“Another rate hike is probably coming this year because current policy isn’t very restrictive. With inflation above target and most measures of economic activity strong, price stability is the Fed’s dominant mandate,” said David Russell at TradeStation.

On Wednesday, Iran-backed Yemeni Houthi rebels attacked airports in Saudi Arabia. Three people were killed, and another 36 were injured, according to the Saudi aviation authorities, as reported by the BBC. The strikes came amid a renewed escalation in fighting between the Houthis and Yemeni government forces backed by Riyadh.