The price of oil 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 more than $105 per barrel in early trading, while U.S. crude oil rose almost 5% to nearly $93 per barrel. Benchmark diesel futures jumped 4.5% in European trading. Heating oil, a proxy for jet fuel, rose more than 4%.
The move higher in oil prices also pushed up bond yields. The 10-year Treasury yield, which heavily influences consumer borrowing rates, jumped to 5.35%. That level effectively reversed a drop in yields seen late Wednesday. The yield on every other Treasury bond also rose.
U.S. stock futures dropped in response. S&P 500 futures fell 0.6% and Nasdaq 100 futures slid 0.8%. Futures for the Russell 2000, which tracks small and medium-sized companies, fell 1%.
No decisions have yet been made yet about resuming combat operations in Iran, people familiar with the discussions told NBC News.
But with the midterm elections less than a month out and early voting underway, any substantial action by the Trump White House in the coming weeks would be likely to have at least some impact on voter attitudes.
A return to large-scale U.S. strikes on Iranian targets would represent a significant escalation in the war and an end to the uneasy stalemate between Washington and Tehran that has held for three months.
The prospect of U.S. forces resuming strikes on Iran was first reported Wednesday by The Atlantic.
Smaller-scale Iranian attacks on commercial shipping have reduced traffic through the Strait of Hormuz, a critical artery for global oil supplies, to just a fraction of prewar levels.
From Sept. 28 through Oct. 4, daily traffic in the strait averaged fewer than 23 ships a day, according to data from MarineTraffic. Before the war, hundreds of ships per day passed through the waterway delivering crude oil and related products to global markets.
Oil and commodities market experts have repeatedly warned that any escalation in the fighting in Iran will cause oil prices to trend even higher.
“The market remains exposed to significant risks,” Bank of America’s head of global commodities, Francisco Blanch, wrote in early September. If skirmishes curbing oil flows continued into the year’s end, he wrote, Brent could trade in a $95-$120 per barrel range.
“Meanwhile, a broader conflict resulting in major energy infrastructure damage may spike prices” as high as $150 per barrel, he added.
The cost to ship crude oil from countries that are not directly impacted by the closure of the strait has also reached new highs, as producers scramble to meet demand.
It now costs $77 million for a crude carrier to move U.S. oil to Asia, according to Bloomberg, which cited data from the Baltic Exchange in London. The average price for the same route in 2025 was just $9.2 million.
The continued elevation of crude oil prices has caused gas prices to remain higher for consumers, with just weeks until polls close in the midterm elections. On Thursday, the national average price for regular unleaded gas was $4.36 per gallon. That price is more than 45% higher than when the United States and Israel launched the war against Iran on Feb. 28.
Diesel fuel prices have soared even more, spurred on by recent escalations in the Russia-Ukraine war. At $6.28 per gallon, diesel has risen almost 70% since Feb. 28.
