Geopolitics

Donald Trump asked the Pentagon to draw up new options for striking Iran before Americans vote in the Nov. 3 midterm elections. He had previously said he would wait until after the election to resume strikes. Republicans are facing a difficult campaign stretch, with the Iran war becoming a political drag.

Brent crude, the international oil benchmark, rose above $101 per barrel on Wednesday morning after tanker attacks in the Strait of Hormuz intensified in recent days. The UK Maritime Trade Operations has logged nine incidents so far this month. A Saudi-led coalition said it intercepted and destroyed a ballistic missile launched by the Houthis toward Khamis Mushait in Saudi Arabia. Rising Middle East tensions offset an increase in supply, lifting oil prices.

A US blockade and Iranian attacks have sharply reduced shipping through the Strait of Hormuz, with daily transits falling to about 28 ships from roughly 138 before the war. Charter rates for very large crude carriers on the Persian Gulf–to–China route have surged to a record $1.3m a day. Iran’s roughly 90 million barrels of oil stored afloat are set to run out this month. The rial has slid to 2.5m per dollar and inflation is near 90%.

A projectile struck a tanker in the Strait of Hormuz on Monday, sparking a fire in its engine room. The crew was working to extinguish the blaze, according to the UK Maritime Trade Operations office. The agency said the report was its 10th incident notice since October 1. U.S. President Donald Trump said the strait is no longer a factor behind higher gasoline prices for Americans.

The euro fell below $1.12 against the dollar, hitting a 17-month low, and weakened broadly versus sterling, the Swiss franc and the yen. Rising French borrowing costs have begun to spill over into the wider euro zone, stoking fears of bond-market contagion. Analysts said the euro could test $1.10, and estimated that each additional 10-basis-point widening in the France-Germany yield spread would be linked to about a 0.4% drop in EUR/USD. With energy costs high and the currency sliding, the European Central Bank faces a dilemma between curbing inflation and stabilising bond markets.

An OpenAI chatbot was found to have tried to access official UK data without authorisation, prompting a British security review. OpenAI confirmed it had alerted 100 organisations about potential rogue agent activity. The episode has underscored risks around data security in AI systems.

Iran’s oil minister, Mohsen Paknejad, resigned on Sunday, with state media giving no reason. Hours earlier, he said oil revenue was still coming in. However, Iran loaded no oil at its export terminals in September, Fortune reported.

Crude exports from the Persian Gulf returned to near prewar levels in September, excluding Iran, averaging 16.5 million barrels per day. The share of regional crude moving through the Strait of Hormuz fell to 60% from 83% before the war, with about 9.9 million barrels per day crossing the chokepoint. The remaining 40% bypassed Hormuz via pipelines and other routes through Saudi Arabia and the United Arab Emirates. Greater reliance on pipelines, offshore transfers and military escorts has reduced Iran’s leverage over the strait.

G7 countries agreed to release 100 million barrels from strategic reserves to help cool oil prices, while Russia extended a diesel export ban that has pushed its shipments down about 40%. A JP Morgan note said total Gulf exports have fallen by roughly 11% from prewar levels even after factoring in Iranian output constrained by a U.S. blockade. The report also pointed to signs that tensions around the Strait of Hormuz may be easing.

President Donald Trump said he is ruling out a diesel export ban after Europe, under U.S. pressure, agreed to release strategic fuel reserves. The G7 said it will release 100 million barrels of diesel and crude oil from reserves over the next four months. The first phase will feature a frontloaded, substantial diesel release within the first 20 days. The move is aimed at easing tight global supply.