Brent settles at $104 as Iran steps up tanker attacks, while Trump rules out Iran strikes before the midterms

Brent crude futures rose 4% on Thursday to settle at $104.28 a barrel, CNBC reported. Two things drove the move: Iran increased its attacks on tankers in and around the Strait of Hormuz, and Hurricane Isaias threatened US offshore production. CNBC counted nine tankers attacked over the past week. It also reported that oil companies shut in about 500,000 barrels a day, roughly 25% of Gulf of Mexico output, ahead of the storm. West Texas Intermediate (WTI) rose 3.6% to $91.49. CNN reported that the attacks have reduced tanker crossings through the strait to a two-month low.

Prices came off their session highs after President Donald Trump wrote on Truth Social that the US would "not be attacking Iran at any time prior to the Midterm Elections" on November 3. Bloomberg reported that Trump cited "productive discussions" with Tehran and said his main goal is to prevent Iran from obtaining a nuclear weapon. Trump's statement answers the timing question that earlier reports had left open. The Israeli business daily Globes reported on Thursday morning that the Pentagon had told the US military to finish preparing for a renewed large-scale war with Iran. According to Business Standard's account of the overnight report, US Central Command received the instruction several days ago. The order set no date, and a resumed campaign would include extensive strikes on Iranian energy, infrastructure and nuclear targets. US and Israeli sources had said strikes could come before the midterms, and possibly before Israel's election a week earlier. On October 1, The Washington Post reported that the military was planning a possible surge of thousands of naval personnel to the region while Trump considered renewed strikes after the midterms. Trump's pledge covers only the period before the election, so the preparations remain in place for the weeks after it. None of the reports reviewed carried a response from the Iranian government.

The fighting at sea continues regardless of the pledge. On September 9, the US sank five Iranian oil tankers. US Central Command said the strikes answered two ballistic missile attacks by Iran's Islamic Revolutionary Guard Corps (IRGC) on a US Navy warship. Iran said it then attacked 10 ships near Hormuz, including two US vessels and eight tankers, Al Jazeera reported. Central Command said no US warship was struck. Reuters, in a report carried by Asharq Al-Awsat, called it the biggest wave of attacks on shipping by both sides since the war began. Secretary of State Marco Rubio said at the time that Iran would "lose tankers" every time it tried to hit US naval ships.

Before Thursday's rally, Brent had risen above $102 in Asian trading, CoinDesk reported, and Globes put Brent at $102, with Asian stocks lower and Wall Street futures flat after Wednesday's losses. Brent closed at $100.87 on October 7, according to Trading Economics. The US Energy Information Administration (EIA) said Brent averaged $114 in September after attacks on Gulf oil infrastructure, including Saudi Arabia's East-West pipeline, which carries crude around the Strait of Hormuz. Thursday's settlement is close to the EIA's fourth-quarter forecast of $105.

The bond market has been reacting to the same oil prices. CoinDesk reported that the oil move pushed Treasury yields back toward their highest levels since 2002. On October 6 the 10-year yield reached 5.34% and the 30-year yield 5.70%, both the highest since 2002, according to Trading Economics. Higher energy costs add to the inflation that the Federal Reserve is already raising rates to contain, and buyers of long-term debt are demanding higher yields to cover that risk.