Crude oil prices rose 4% on Thursday after fighting between the U.S. and Iran sharply escalated this week, as the war drags on into its seventh month with no end in sight.
U.S. West Texas Intermediate futures jumped 4.4% to $100.27 per barrel by 8:57 a.m. ET. Brent crude, the international benchmark, advanced 4% to $105.24 a barrel.
Top White House advisors have discussed with President Donald Trump the possibility that the Iran war could drag on past Inauguration Day in January 2029, U.S. officials told The Wall Street Journal.
The report contradicts Trump’s claim on Wednesday that the war would end immediately after the midterm elections. He has asserted for months the conflict was drawing to a close, only for fighting to escalate.
Trump also claimed Wednesday that oil and gasoline prices would fall after the midterms. Retail gasoline prices hit a Labor Day record on Monday and diesel prices are expected to cross $6 per gallon for the first time ever in the coming days.
Trump said Iran was “desperate to try and affect the election, so that we can get a nice weak group of people in there, and leave them alone and let them have their nuclear weapon.”
Fighting between the Washington and Tehran has erupted this month after a period of relative calm in August. Iran has tried to attack American warships several times while the U.S. military has destroyed at least eight Iranian tankers since Saturday in retaliation.
The escalation in the U.S.-Iran conflict is raising the risk of oil prices surging above $120 a barrel as attacks on shipping intensify, said Daan Struyven, co-head of global commodities research at Goldman Sachs, in an interview on CNBC’s “Squawk Box Asia.”
The physical market may be tightened even more by a further decline in transit volumes, broader escalation or threats to energy infrastructure, extending the upward move in oil prices, said Andrei Constantin, commercial director and trading adviser at TFP Software FZCO.
“WTI has completely unwound its selloff between early June and July, while Brent prices are now well above those seen in early June,” said David Morrison, senior market analyst at Trade Nation.
