Market Move
Crude climbed fast on Thursday as markets braced for a longer grind in the Persian Gulf. WTI was up 4.3% to $100.19 a barrel at 9:14 a.m. ET, a level not seen since May, while Brent added 4% to $105.28.
Why Prices Are Rising
Tensions snapped back after a quiet August. Iran has made multiple attempts this month to strike U.S. Navy vessels, and since Saturday the U.S. military has, in response, taken out at least eight Iranian tankers. In Saudi Arabia, Iran's Houthi partners in Yemen hit several energy sites and other locations this week, wounding more than 70 civilians and stoking fears the conflict is widening.
Per The Wall Street Journal, U.S. officials said senior White House advisors spoke with President Donald Trump about the war potentially running beyond Inauguration Day in January 2029. That undercuts Trump's Wednesday assertion that the war would wrap up right after the midterms. He also told reporters he expects oil and gasoline to get cheaper after the elections, and 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."
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What It Means For Your Portfolio
Speaking on CNBC's Squawk Box Asia, Daan Struyven, who serves as Goldman Sachs's co-head of global commodities research, said the flare-up boosts the chance crude could surge above $120 a barrel if assaults on shipping intensify. Andrei Constantin of TFP Software FZCO said reduced transit volumes, a broader flare-up, or threats to energy infrastructure could further squeeze the physical market and extend the rally. As Trade Nation's David Morrison put it, "WTI has completely unwound its selloff between early June and July, while Brent prices are now well above those seen in early June."
For everyday budgets, the run-up in crude is already visible at gas stations: gasoline hit a Labor Day record on Monday, and forecasts indicate diesel could climb above $6 per gallon in the coming days - a milestone without precedent. That filters into everything from commuting costs to the price of delivered goods.
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