The US-Iran conflict has reached a critical juncture, with expectations of military escalation and a stalled negotiation process fermenting simultaneously, sending oil prices sharply higher.
According to Xinhua News Agency, US President Trump publicly stated on the 6th that the military operation against Iran "must be wrapped up," and said the only remaining question is "whether to wrap it up gently or forcefully." According to Bloomberg on October 8, The Atlantic cited two US government officials in reporting that the White House has asked the Pentagon to draft strike plans targeting Iran, and that related actions could be carried out before next month's midterm elections. This report directly shattered the market's previously widespread expectation that Trump would maintain a relatively restrained posture before the elections.
After the news emerged, oil prices rose in response. West Texas Intermediate crude climbed toward $89 per barrel, while Brent crude closed near $100 per barrel on Wednesday and has now surpassed $101 per barrel. At the same time, Tropical Storm Isaias forced the shutdown of more than a quarter of crude production in the Gulf of Mexico, further intensifying supply-side pressure.
Trump's "Wrap-Up" Remarks: Gentle or Forceful Remains Unknown
According to Xinhua News Agency, Trump said during a speech at Sparrows Point, Maryland, on the 6th that the US military operation against Iran has been done "very well," and made clear that the operation "must be wrapped up."
He also noted that "the only question to consider is in what manner to wrap it up, whether gently or forcefully," wording that leaves obvious room for strategic ambiguity.
Since the US and Israel launched military strikes against Iran on February 28 this year, the United States has employed multiple means including airstrikes, maritime blockades, and economic pressure against Iran. The conflict has now lasted more than seven months and has still not ended.
Pentagon Drafts "Pre-Election Strike Plan," Market Expectations Upended
According to Bloomberg, The Atlantic cited two US government officials in disclosing that the White House has asked the Pentagon to draft a plan for strikes on Iran that could be executed before the midterm elections, with the related planning being advanced by US Central Command, which is responsible for coordinating operations in the theater.
The report pointed out that the core motivation behind the move is that Trump hopes to push oil prices lower before the elections and show voters progress in the conflict. However, the report also acknowledged that even supporters of the plan admit that limited strikes alone would not be enough to force Iran back to the negotiating table, restore safe passage through the Strait of Hormuz, or bring oil prices down before Election Day. Supporters' logic is that renewed strikes after months of relative calm could allow Trump to project a tough stance and generate political momentum for Republicans before the elections.
The Atlantic also noted that the scale of the strikes, the choice of targets, and whether they will ultimately be carried out are still under discussion. One possible path is to conduct limited strikes before the elections and then follow up with larger-scale operations afterward.
It is worth noting that this report directly contradicts the market's previous mainstream assessment, which generally held that Trump would not proactively escalate the conflict before the elections, for fear of creating more negative associations among voters about a war that has already weighed on Republican candidates.
Oil Prices Rise Across the Board, Shipping Costs Hit Record High
Since the start of this year, the US-Iran conflict has continued to disrupt Middle East crude exports, accelerating the depletion of global energy inventories, driving oil prices sharply higher, and fueling a rise in global inflation.
According to Bloomberg, the cost of chartering a Very Large Crude Carrier to transport US crude to Asia has now reached $77 million, compared with an average of just $9.2 million a year earlier, marking a record surge in freight rates and significantly raising supply chain costs.
In the United States, official data showed that national crude and fuel exports rebounded last week to a seasonal record high, highlighting strong overseas demand, while national crude inventories fell by 3.2 million barrels.
At the same time, Tropical Storm Isaias shut down more than a quarter of crude production in the Gulf of Mexico. According to data from the Bureau of Ocean Energy Management, the storm is expected to strengthen into a strong Category 2 hurricane in the coming days, adding further short-term disruptions on the supply side.
Strait of Hormuz: Competing Narratives and Supply Reality
The United States and Iran have sharply opposing accounts regarding control of the Strait of Hormuz.
According to Bloomberg, US Central Command said in a social media post that 20 million barrels of crude currently flow through the Strait of Hormuz each day, in line with pre-conflict levels, higher than the estimate of 1.2 million barrels per day given by Vitol CEO Hardy at a London conference this week.
However, Iranian state media Tasnim cited data saying that the volume of crude passing through the Strait of Hormuz has fallen sharply to about 3.8 million barrels per day over the past two days, with a weekly average of about 9.3 million barrels per day. An adviser to the Islamic Revolutionary Guard Corps claimed that the strait is "completely under Iran's control" and that the amount of crude currently flowing out is "very small."
On the actual conflict front, more than ten incidents of Iranian drone attacks on foreign transit vessels have occurred over the past eight days. On October 7, an oil tanker about 51 nautical miles north of Qatar was hit by "multiple projectiles," causing casualties.
In addition, Iran-backed Houthi forces attacked two airports in Saudi Arabia, killing 3 people and injuring dozens; the Saudi-led coalition immediately announced the destruction of 82 Houthi targets in multiple locations in Yemen.