Oil gains on signs US may resume military strikes against Iran

[TOKYO] Oil rose on signs the US may resume military strikes against Iran, risking fresh turbulence in the region that may hurt energy flows.

Brent futures for December, which expire later on Friday (Oct 30), climbed towards US$117 a barrel, while the more-active January contract was above US$112.

A top commander briefed US President Donald Trump on military options on Thursday (Oct 29), The Wall Street Journal (WSJ) reported. The US leader has repeatedly given signals he may restart airstrikes against Teheran after midterm elections next week.

In Iran, one of the country’s top negotiators, Parliament Speaker Mohammad Bagher Ghalibaf, suggested that the Islamic Republic’s positions on ending the war would not be compromised.

His remarks followed confirmation from Teheran that officials had received a letter sent by US Vice-President JD Vance, which the WSJ reported as a bid to revive the nations’ peace negotiations.

Global benchmark Brent has rallied 13 per cent in October, hitting a six-month high, despite a revival in flows through the Strait of Hormuz, with producers managing to ship cargoes even with elevated risks to shipping.

Low inventories and tight supplies of refined products have also supported prices, in part following waves of Ukrainian attacks on Russian processors.

“Even if physical flows recover, traders will find it difficult to keep short positions for long without the US and Iran formally agreeing to a ceasefire,” said Naohiro Niimura, a partner at energy consultancy firm Market Risk Advisory, referring to investors holding wagers on lower crude prices.

Regional risks were in focus again as a tanker was struck by an unknown projectile while completing an outbound transit of Hormuz on Thursday, according to UK Maritime Trade Operations.

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Meanwhile, ExxonMobil and Chevron cancelled plans to attend the ADIPEC oil conference in Abu Dhabi in November amid heightened security concerns.

Away from the Middle East, Ukraine’s military has paused its strikes against Russian oil refineries following pressure from Trump, the WSJ reported, citing people with knowledge of the operations.

The unofficial move began early last week and is expected to last until after the US midterms, potentially extending further into November, it said.

The midterms – which will be held on Nov 3, halfway through Trump’s second term – determine control of Congress.

Ahead of the contests, national polls show that the war in Iran is unpopular, with many voters also unhappy about rising living expenses, including fuel costs. Average diesel prices have risen almost 80 per cent in 2026 so far, hitting a record in September.

The US elections “represent the next major geopolitical catalyst for oil markets”, ANZ Group strategists Daniel Hynes and Soni Kumari said in a note.

“The possibility of renewed hostilities after the vote has increased uncertainty around an already fragile physical market.”

In Israel, Prime Minister Benjamin Netanyahu and his allies secured 53 seats in the general election held this week, ahead of the main opposition’s bloc of 48 but short of a majority allowing them to rule without further backing.

The country joined with the US to start the war against in Iran in late February with the stated aim of dismantling its nuclear programme.

The oil supermajors will wrap up a flood of earnings this week, with results from ExxonMobil and Chevron due later on Friday. Shell CEO Wael Sawan said on Thursday that current oil prices no longer looked temporary because global inventories were so depleted. BLOOMBERG