Oil hits $117 as Tehran threatens US ships

Brent crude prices have surged to approximately $117 per barrel, marking the highest level observed since April. This sharp increase in energy costs reflects the market's anxiety over a potential escalation in the Middle East conflict. The spike comes as regional tensions intensify and shipping routes face renewed threats from both naval mines and direct attacks.

The conflict began with a surprise offensive on February 28, which ignited an eight-month war that has since destabilized the broader region. Since that initial strike, the fighting has oscillated between intense bombardment and periods of naval restriction. Washington has utilized a combination of sanctions and a naval blockade to exert economic pressure on Tehran, aiming to force concessions without immediate ground combat.

In the most recent development, Iranian military leadership issued a stark warning regarding American naval presence. Ali Abdollahi, the chief of the general staff, stated that the US Navy cannot re-enter Iranian territorial waters or their immediate surroundings. He asserted that Tehran can target any vessel in the region, suggesting that the US president could only dream of his soldiers and military returning to the Persian Gulf.

President Donald Trump addressed the uncertainty at a rally in Florida on Friday. He indicated that the United States has not yet finalized its next strategic move. Trump mentioned that the US military might execute another large-scale bombing campaign, a tactic he referred to as a repeat of the initial massive strikes. He weighed the option of ending the fighting quickly with significant force against the strategy of letting the current blockade and sanctions continue to squeeze the Iranian economy.

Abdollahi criticized the American approach as contradictory. He argued that claims of significantly degrading Iran's military capabilities are undermined by Washington's reluctance to move its aircraft carriers and support ships closer to Iranian territory. Iranian forces intend to trap the US and Israel in a quagmire in retaliation for the initial February attack. The Islamic Revolutionary Guard Corps has adopted a more offensive doctrine, claiming that seven tankers were attacked or hit mines overnight into Thursday and two supertankers struck mines on Friday.

The war has expanded to other fronts as well. The Iran-allied Houthis in Yemen struck Riyadh on Saturday, following recent attacks on Dammam's international airport and the Shaybah oilfield. In response, Saudi forces have bombed Houthi-held areas in Marib and Taiz. Meanwhile, in southern Lebanon, reported Israeli air strikes hit areas around Nabatieh, and artillery fell near Zawtar ash-Sharqiyah. Israeli Prime Minister Benjamin Netanyahu, who faces an election on October 27, ordered a lockdown of the occupied West Bank after two soldiers were killed in Hebron.

Diplomatic efforts have struggled to gain traction. Senior diplomats from Turkiye, Saudi Arabia, Pakistan, and Egypt met with counterparts from the UK, France, Germany, and Italy in Istanbul on Friday. Neither the US nor Iran was present at the talks. Turkiye's Foreign Minister Hakan Fidan stated that a new attack on Iran would widen the war, adding that no one is endorsing such a move at this point. German Foreign Minister Johann Wadephul blamed Iran and the Houthis for regional instability, while the four regional ministers cited Israeli occupation as the main source of instability.

Iranian state-linked media suggest that Tehran has activated a dead hand doctrine. This strategy allegedly allows attacks on US, Israeli, and regional interests to continue from all 31 provinces if senior leaders are assassinated again. The IRGC has also threatened seabed internet and communication cables if civilian infrastructure is targeted once more. US intelligence reports indicate that Iran has substantially increased efforts to strike American officials in the Middle East and elsewhere.

The next phase of the conflict remains uncertain. Washington is weighing options between a decisive military strike and continued economic pressure. Tehran has signaled readiness to defend its waters and maintain offensive operations. With diplomatic talks stalling and military threats escalating, the market continues to price in the risk of a prolonged and volatile conflict.