WASHINGTON (dpa-AFX) - Crude oil prices have surged on Thursday amid increasing concerns of long-term supply disruptions following reports that the U.S. and Israel are planning for a joint military operation against Iran after the November midterm elections in the U.S.
WTI Crude Oil for December delivery was last seen trading up by $2.19 (or 2.25%) at $99.34 per barrel.
According to a report by the New York Times, the U.S. and Israel have drawn up plans for recommencing strikes on Iran after the U.S. midterm elections in the first week of November.
The joint operation is set to be a short but intense military action targeting Iran's nuclear facilities, energy infrastructure, and missile and drone capabilities. The two nations have started rehearsing maneuvers.
However, the report also stated that diplomatic efforts to reach an agreement with Iran are ongoing.
Meanwhile, at a rally in South Carolina yesterday, U.S. President Donald Trump stated that the U.S. could end its war with Iran, but he wants a lasting settlement rather than a temporary peace agreement. Trump claimed that the U.S. defeated Iran militarily and financially.
Yesterday, Reuters reported that the U.S. has instructed some diplomats and their families to evacuate Middle East posts including Saudi Arabia in the wake of attacks by Houthi militants on key infrastructure in Riyadh.
Supply disruptions in the major crude-producing Arab region and a consequential increase in energy costs could push the U.S. Federal Reserve increase interest rates at its meeting next week.
Yesterday, U.S. Secretary of State Marco Rubio stated that negotiations with the Iranian regime are not easy to handle. Rubio also claimed shipping traffic across the Strait of Hormuz is returning to pre-war levels.
However, a spokesperson for Iran's Islamic Revolutionary Guards Corps Hossein Mohebbi disputed Rubio's claims. He stated that a few ships might have crossed the strait under the cover of darkness but that could not be interpreted as the strait being open.
Iran's leaders have repeatedly stressed that Iran would open the strait only if the U.S concedes to Iran's demands.
Yesterday, the IRGC also announced that it was preparing to unveil a new weapon, which it termed the 'Father Of All Bombs,' in the event of the Pentagon using its 'Mother Of All Bombs' against Iran.
Pakistan and Qatar are frantically working to bring an end to the U.S.-Iran hostilities.
Initial reports from a day before stating that the U.S. and Iran are on the verge of reaching an agreement on a compromise peace plan brought oil prices down. After Iranian leadership dismissed the claims and stated that talks cannot happen with the U.S. while it threatens Iran economically and militarily, prices bounced back.
Elsewhere in the Middle East, Yemen's Houthi militia announced that it carried out an attack on a Saudi Arabian airport.
Supply disruption concerns in the near-term from the gulf have returned to energy markets with the possibility of dual conflicts in the gulf region.
Traders are focused on the upcoming two-day meeting of the U.S. Federal Reserve next week at the conclusion of which the Fed will announce its interest rate decision.
Economists are speculating that the Fed could contemplate a rate hike in response to higher inflation.
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