Oil prices eased Friday morning after President Donald Trump said on Truth Social Thursday that the US would not attack Iran before the November 3 midterm elections.
“We will not be attacking Iran at any time prior to the Midterm Elections,” Trump wrote, adding that Washington is holding “productive discussions” with Tehran.
The comments pulled prices back from a session high of $105.88 a barrel for Brent, which settled Thursday at $104.28, up 4.1%. West Texas Intermediate climbed 3.6% to close at $91.49 before slipping below $90.50 in Asian trade Friday. Brent was near $103 in early Friday trading.
The surge had come after reports that the US had prepared plans for a three-day military operation against Iran, targeting drone and missile arsenals, energy infrastructure and other sites. The White House had reportedly asked the Pentagon to develop those options, and President Trump had considered action before the midterms, per earlier reporting.
Iran has been escalating pressure on shipping in the region. The UK Maritime Organization recorded at least nine attacks on tankers in the Strait of Hormuz and the Persian Gulf during the first seven days of October, half of all attacks recorded in September.
Iran’s Fars news agency reported several “heavy explosions” in the strait late Thursday after tankers trying to cross on the southern route struck mines, citing unidentified sources from Iran’s military. There was no independent confirmation.
Blockade stays, strike does not
Trump reiterated that the US naval blockade of Iranian ports would remain fully operational. He also said shipments of crude through the Strait of Hormuz were flowing at record volumes, a claim at odds with the number of reported attacks this month.
“While Iran is in very bad condition, both Economically and Militarily, and while the Blockade will remain in full force and effect…we will not be attacking Iran at any time prior to the Midterm Elections,” Trump wrote.
The US imposed fresh sanctions Thursday on individuals, networks and 17 vessels tied to Iran’s so-called shadow fleet for transporting Iranian crude, oil products and petrochemicals.
The war between the US and Iran, now in its eighth month, has turned the strait into a recurring risk point. Before the conflict, shipments through Hormuz carried roughly 20% of the world’s oil and refined fuel.
Hurricane Isaias adds another squeeze
On the supply side, Hurricane Isaias is bearing down on the US Gulf Coast, expected to make landfall late Friday or early Saturday, with Alabama, Mississippi and the Florida Panhandle most at risk.
Roughly 1.3 million barrels per day of Gulf of Mexico oil production, about 63% of the region’s output, has been shut in as of Thursday, according to the Bureau of Safety and Environmental Enforcement.
“The renewed rise in oil prices is intensifying inflation concerns and adding to upward pressure on bond yields,” said Fawad Razaqzada, an analyst at Forex.com.
Treasury yields have climbed to levels last seen more than two decades ago, weighing on equity valuations. Analysts at Scotiabank said in a note that “the impact on oil prices and global bond yields is clear, with WTI up $4/bbl on the day and trading back above $90/bbl as the US 10Y threatens fresh multi-decade highs above 5.35%.”
Wall Street’s main indexes closed lower Thursday for a second straight session. European markets also finished in the red, though higher oil prices benefited energy majors across the Atlantic. Jobless claims came in at 197,000, a low reading that suggests the labor market is still holding up despite the wider uncertainty.
Analysts keep widening their range
Goldman Sachs sees meaningful upside to crude if attacks intensify. “Recent attacks had shown that disruptions to shipping could spread and become more severe,” said Daan Struyven, co-head of global commodities research at Goldman Sachs, in comments carried by Bloomberg. Goldman outlined a scenario with oil as high as $120 a barrel, and a path back toward $80 if exports normalize.
“We simply don’t know how to model the endgame,” JPMorgan analysts wrote earlier this month, arguing that the conflict has already crossed thresholds the bank once assumed would not be tested.
Freight rates for supertankers are climbing as shipowners price in hostile waters, pushing up the cost of moving any barrel across the region and further straining supply chains.
Both Brent and WTI gained more than $5 a barrel at one point on Thursday, the sharpest single-day move in weeks, before the relief from the White House statement.
Weekly gains are still in play for Brent despite Friday’s dip, given the four-session climb into Thursday’s close. WTI is set for a slight weekly decline even with the supply disruptions, a reminder that the geopolitical risk premium builds unevenly across benchmarks.
Markets now watch three things in sequence. The first is whether talks between Washington and Tehran produce a visible offramp, or whether the strike plans stay on the shelf until after the election. The second is the Hurricane Isaias landfall and how quickly shut-in US Gulf production comes back online. The third is Fed commentary, minutes from the most recent meeting released Thursday showed most officials expect another rate hike before year-end, a stance that keeps yields elevated and growth assets under pressure.
Friday’s relief is a pause in a wider supply squeeze, not a resolution. The blockade remains in place, Iranian attacks on shipping continue, and US output in the Gulf is down by more than half until the storm clears.