Oil prices jumped sharply Thursday as President Donald Trump weighs whether to resume large-scale U.S. military operations against Iran in the coming weeks.
Brent crude oil rose more than 5% to over $105 a barrel in early trading, while U.S. crude rose almost 5% to nearly $93 a barrel. Benchmark diesel futures jumped 4.5% in European trading. Home heating oil, a substitute for jet fuel, rose more than 4%.
Rising oil prices have also pushed bond yields higher. The 10-year Treasury yield, which heavily influences consumer borrowing rates, jumped to 5.35%. This level effectively reversed a decline in yields seen Wednesday evening. The yield on all other Treasury bonds also increased.
U.S. stock futures fell in response. S&P 500 futures fell 0.6% and Nasdaq 100 futures fell 0.8%. Futures for the Russell 2000, which tracks small and mid-sized companies, fell 1%.
No decision has yet been made on whether to resume combat operations in Iran, people familiar with the discussions told NBC News.
But with the midterm elections less than a month away and early voting underway, any substantial action from the Trump White House in the coming weeks would likely have at least some impact on voter attitudes.
A return to large-scale U.S. strikes on Iranian targets would represent a significant escalation of the war and an end to the difficult three-month standoff between Washington and Tehran.
The prospect of renewed U.S. strikes against Iran was first reported Wednesday by The Atlantic.
Smaller-scale Iranian attacks on commercial shipping have reduced traffic in the Strait of Hormuz, a key artery for global oil supplies, to only a fraction of pre-war levels.
From September 28 to October 4, daily traffic in the strait averaged fewer than 23 ships per day, according to MarineTraffic data. Before the war, hundreds of ships used the waterway every day to deliver crude oil and related products to global markets.
Oil and commodity market experts have repeatedly warned that any escalation of fighting in Iran would lead to an even greater rise in oil prices.
“The market remains exposed to significant risks,” wrote Francisco Blanch, head of global commodities at Bank of America, in early September. If skirmishes to curb oil flows continue through the end of the year, he writes, Brent could trade in a range of $95 to $120 a barrel.
“Meanwhile, a broader conflict leading to major damage to energy infrastructure could push prices up” to $150 a barrel, he added.
The cost of transporting crude oil from countries not directly affected by the strait closure has also reached new heights, as producers scramble to meet demand.
It now costs $77 million for a crude carrier to transport American oil to Asia, according to Bloomberg, which cites data from London’s Baltic Exchange. The average price for the same route in 2025 was just $9.2 million.
The continued rise in crude oil prices has caused gas prices to remain higher for consumers, just weeks before polls close for the midterm elections. As of Thursday, the national average price of regular unleaded gasoline was $4.36 per gallon. This price is more than 45% higher than when the United States and Israel launched war against Iran on February 28.
Diesel fuel prices have soared further, boosted by the recent escalation of the war between Russia and Ukraine. At $6.28 per gallon, diesel is up nearly 70% since February 28.
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