Crude oil prices surged following heightened geopolitical tensions in the Middle East and supply constraint concerns linked to a potential hurricane off the United States coast.
International benchmark Brent crude rose 5% to reach $105.30 per barrel on Thursday, triggering widespread sell-offs across global equity and bond markets.
In the UK, the yield on 10-year government bonds climbed six basis points to 5.515%—its highest level since July 2007—reflecting investor anxiety that elevated energy costs could drive inflation higher.
The yield on the UK’s benchmark 30-year bond rose three basis points to 6.0117%, following a peak of 6.036% on Wednesday—its highest level since January 1998. The escalating cost of government borrowing increases fiscal pressure on John Healey as he prepares to present his maiden budget on October 28.
Market volatility was further fueled by a report in The Atlantic stating that the White House requested the Pentagon to draft options for potential military strikes against Iran ahead of the US midterm elections.
Citing anonymous officials within Donald Trump’s administration, the report noted ongoing deliberations regarding the targets, scope, and ultimate execution of potential strikes.
Fresh military strikes
The report has diminished expectations that the US administration will avoid escalating conflict with Iran prior to next month’s midterm elections, indicating that a initial “limited operation” could precede broader military action following the vote.
As the US-Israeli military campaign against Tehran enters its ninth month, the prospect of additional strikes poses further risks to Middle Eastern oil supplies. Elevated rates of tanker attacks in the Strait of Hormuz have significantly curtailed shipping traffic through the critical waterway, compounding global supply concerns.
According to United Kingdom Maritime Trade Operations (UKMTO), the latest incident occurred on Wednesday when a tanker off the northern coast of Qatar was struck by projectiles, causing casualties.
Similarly, oil prices experienced further upward pressure as Tropical Storm Isaias strengthened into the first hurricane of the Atlantic season, curtailing crude output in the Gulf of Mexico.
In response to the hurricane’s trajectory toward the region—with landfall anticipated between Friday and Saturday—major energy producers, including Shell and Chevron, announced the temporary suspension of their offshore operations.
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