Oil prices have surged sharply due to concerns over escalating tensions in the Middle East and the threat of a storm along the U.S. coast. Brent crude oil, which is recognized as the international benchmark, rose by 3.8% to $104 per barrel on Thursday, leading to widespread selling in global bond and stock markets.
Threat of Military Strikes Against Iran
The White House has asked the Pentagon to prepare options for an attack on Iran ahead of the U.S. midterm elections. A report from anonymous officials in the Donald Trump administration indicates that the scope and potential targets of these strikes are still under discussion.
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This report has weakened hopes that Trump would refrain from escalating tensions with Iran before the midterm elections. Limited operations may be accompanied by further actions after the elections.
Pressure on Oil Production and Rising Energy Prices
Any new attack on Iran poses greater risks for oil supply from the Middle East. The war between the United States and Israel against Iran has now entered its eighth month. Attacks on tankers in the Strait of Hormuz have reached their highest level during the war and have disrupted traffic in this waterway.
The latest attack occurred on Wednesday when a tanker off the northern coast of Qatar was targeted by several missiles, resulting in injuries to several individuals. Additionally, rising oil prices have been attributed to pressure on production in the Gulf of Mexico, following the strengthening of Tropical Storm Isaias as the first storm of the Atlantic season.
Shell and Chevron announced that they have halted production due to the approaching storm in the area. The Danish shipping group Maersk also stated that it is increasing emergency fuel surcharges for all export collections and import deliveries. This rise in energy prices has raised concerns about inflation, and central banks are expected to be forced to raise interest rates to control prices.
Sales in global bond markets also continued on Thursday. In France, which has been severely affected by concerns over rising debt and increasing costs, the 10-year yield rose by 6 basis points to 4.931%. The yield in Germany also increased by 2 basis points to 3.504%. Additionally, the yield on 10-year U.S. Treasury bonds, recognized as the highest-quality government debt in the market, rose by 5 basis points to 5.331%.
Declines are also observed in global stock markets. Japan's Nikkei index fell by 1.4% and South Korea's KOSPI index dropped by 2.6%. In Europe, the Stoxx Europe 600 index, which tracks the largest companies on the continent, fell by 1%, and the UK's FTSE 100 also decreased by 0.6% in early trading on Thursday.
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