Breaking: Oil Jumps Over 4% on Reports of US Plans to Strike Iran

Crude prices accelerated through the Asian session and into European trading on Thursday 8 Oct. Euronews reported that after European stock markets opened, Brent rose 3.7% to $103.91 a barrel and WTI rose more than 3.45% to above $91.41. Buying continued from there: at around 12:15 GMT, Trading Economics showed WTI at $92.34, up 4.59%, and Brent at $104.83, up 4.62%, in line with XTB, which said Brent rose more than 4% to above $104 and WTI rose by a similar amount to around $92 a barrel.

It started with a report in The Atlantic on Wednesday 7 Oct (as cited by Euronews) that the White House asked the Pentagon to draft options for strikes on targets in Iran before the US midterm elections on 3 Nov, while Fortune, citing Axios, said the Pentagon is preparing a new round of operations against Iran’s energy, infrastructure and nuclear targets. So far these are only plans, with no reports of new strikes, and an Israeli official told Axios that the chance of major fighting before the election is “not high” but cannot be ruled out.

Supply was also hit by Storm Isaias: XTB said about a quarter of crude production in the Gulf of Mexico had to be shut in (Euronews put it at more than 500,000 barrels per day), and the Houthis also attacked an airport in Saudi Arabia. Higher oil prices make markets worry inflation will stay high for longer, after the FOMC minutes released last night showed most members saw another rate hike this year as likely appropriate, and Fed Governor Christopher Waller said another hike will probably be needed, though the timing is flexible.

Impact on other markets: the US 10-year yield rose about 4–5bp to around 5.34–5.35%, the highest since 2002. The dollar (DXY) was around 102.36, near its strongest since Apr 2025. European stocks sold off, with the Euro Stoxx 50 down about 1.1%, the DAX down about 0.8% and S&P 500 futures down about 0.4%. Gold held steady around $4,120–4,124, up about 0.3%, as support from inflation worries was offset by a stronger dollar and higher yields. The euro (EUR/USD) was around 1.12 and USD/JPY around 158, little changed.

Today the US releases weekly jobless claims (12:30 GMT) and holds a 30-year bond auction, which will show how well markets can absorb high yields. Key factors to watch closely are the White House’s stance on Iran, Storm Isaias’s impact on Gulf of Mexico production, and whether oil can hold above $90 (WTI) and $100 (Brent). If oil stays high, markets may price in more Fed tightening, which usually supports the dollar and weighs on gold. See all release times in the economic calendar, the latest rates on the central bank rates page and this morning’s market overview at Forex News 8 Oct