Brent hits six-month high on Middle East jitters; Trump, pressed by elections, says he could run "Epic Fury" again
On Oct. 23, New York's Dow Jones Industrial Average (-1.23%), the Standard & Poor's 500 (-0.52%) and the Nasdaq Composite (-0.21%) all closed lower under the shock of surging crude prices. On London's ICE Futures Exchange, Brent crude for December delivery settled 3.14% higher at $116.72 a barrel, its highest level in six months since April. It briefly topped $117 a barrel during the session. The gain reached 20% from early last month and more than 90% from the end of last year. On the New York Mercantile Exchange, West Texas Intermediate for December delivery traded 3.82% higher at $103.27 a barrel.
The key driver pushing up crude is, again, instability in the Middle East. In particular, fears that the Iran war could reignite after the U.S. midterms spurred prices on the day. Speaking in Fort Myers, Florida, Trump said, "We could do another little 'Epic Fury' operation," adding, "Or Iran will make a deal." Epic Fury was the code name for the surprise U.S.-Israeli attack on Iran on Feb. 28 this year. "If Iran is smart, they'll say, 'Let's negotiate seriously now,'" Trump said, stressing, "On the way back from Iran, we'll take care of Cuba, too." He went on to say, "Beautiful ships will pass by Cuba," and previewed, "I'll anchor one of them about 50 yards (about 46 meters) off the shore." Trump added, "Cuba will put up both hands and surrender," and, "Then I'll send Secretary of State Marco Rubio to finish the job." He gave no precise timing, but clearly confirmed the possibility of striking Iran once more.
Earlier, on Oct. 8, Trump said on Truth Social that he "will not attack Iran at any point before the U.S. midterm elections on Nov. 3." At the time, he added, "Iran is in a very bad situation economically and militarily," explaining, "The blockade will be maintained in full."
On Oct. 22, Trump again claimed on his social media platform Truth Social that "Iran is doing everything it can to push up oil prices ahead of the midterm elections." He said, "Iran is fabricating false claims that our strikes hit nothing, because the volume of oil passing through the Strait of Hormuz is now greater than before the conflict began," stressing, "In less than seven months, 75,000 Iranian protesters have died." Trump added, "It is a truly evil regime, yet the world and the 'Dumb Democrats' don't even seem to care."
Trump's plan to strike Iran again is also seen as linked to Netanyahu's political future. Netanyahu has signaled to Trump several times that he wants to attack Iran again. Above all, with his bloc's chances of winning a majority in Israel's Oct. 27 election fading, observers say Netanyahu wants to use the Iran war as a political turning point. Even if he loses the premiership, the thinking goes, escalation would leave him the political mantle of "the leader who confronted the Iranian threat" and plant the seeds for recapturing political initiative. If he loses power, Netanyahu could face pressure to retire from politics or punishment in his ongoing corruption trial.
Facing likely defeat in Israel's Oct. 27 election, Netanyahu also seeks to change the narrative with renewed strikes on Iran
Indeed, according to a poll conducted by Israel's Channel 12 on Oct. 19, Netanyahu's bloc is projected to win 51 of the Knesset's 120 seats, with the opposing camp taking 55. If both blocs fail to reach the 61-seat majority, complex coalition maneuvering would follow — and Netanyahu's incentive to escalate against Iran would grow accordingly. By party, Yashar, led by former military chief of staff Gadi Eisenkot, was projected to finish first with 24 seats, while Netanyahu's Likud came second with 21. On suitability for the next premiership, Eisenkot drew 45% support, widening his lead over Netanyahu, who stood at 33%.
Against that backdrop, Netanyahu has been issuing a steady stream of remarks flaunting his closeness to Trump and highlighting hostility toward Iran. On Oct. 19, Netanyahu posted on X (formerly Twitter) footage of himself thanking Trump by phone for publicly endorsing him, writing that Trump was "an amazing leader of the free world and of America, and the greatest friend Israel has ever had, who will remain in the White House." He urged Trump to finish the Iran war, saying, "We have work to finish, and we will finish it together." According to the U.S. online outlet Axios, U.S. Defense (War) Secretary Pete Hegseth visited Israel the same day and met Netanyahu in person.
On Oct. 21, Britain's Financial Times reported that Israel had prepared a large-scale bombing campaign against Iran on Oct. 10 but shelved it after Trump objected. Targets included power plants and nuclear facilities. On Oct. 13, Axios also reported that Netanyahu and Trump had discussed resuming large-scale operations against Iran before the elections.
In an Oct. 20 speech at the opening ceremony of Tel-Hai College in Kiryat Shmona, near the Lebanese border, Netanyahu acknowledged, "Removing the Iranian regime is the top priority, and we must achieve it," adding, "I have discussed this issue with President Trump several times, including on Oct. 18." Netanyahu said, "The Israeli military has made great progress in defeating Hezbollah, Lebanon's pro-Iranian armed faction," explaining, "I am committed to finishing this job completely, which means bringing down Iran's terror regime." He stressed, "Iran is the head of a venomous octopus. Cut off the head, and the octopus will collapse, and we will enjoy peace with Lebanon."
According to the Washington Post on Oct. 22, Netanyahu said in an Oct. 21 speech at an Israeli military officers' commissioning ceremony that Iran's supreme leader, Ayatollah Seyyed Mojtaba Khamenei, "has decided to follow in his father's footsteps" — a reference to former supreme leader Ayatollah Ali Khamenei — and "has decided once again to develop a bomb of death." He insisted, "The only way to remove the threat once and permanently is to topple the Iranian regime," adding, "This is the instruction I am giving the Israeli military, the Mossad and the security agencies."
Iran counters with a plan to cut undersea internet cables; hardliners push for nuclear armament
As expectations grow that the U.S. and Israel may soon use force, Iran has also moved to prepare. According to Reuters on Oct. 23, Iran has drawn up detailed operational plans to strike undersea communications cables running through Gulf waters directly should the U.S. and Israel resume military attacks. The plan is designed to prolong internet and other communications outages by blocking repair work at the source. According to the U.N.'s International Telecommunication Union, about 99% of global internet traffic travels through undersea cables. International bandwidth passing through the Strait of Hormuz accounts for less than 1% of the total.
According to the FT on Oct. 19, Iranian hardliners are even calling for withdrawal from the Nuclear Non-Proliferation Treaty and nuclear armament. Their logic is that since former supreme leader Khamenei died on Feb. 28, there is no longer any need to keep the nuclear program for peaceful purposes. In 2003, Khamenei issued a fatwa, or religious edict, banning the development, possession and use of nuclear weapons under Islamic law. Mohsen Rezaei, secretary of Iran's Supreme National Security Council, also told Pakistani army chief Asim Munir on Oct. 20 that "not a single handful of enriched nuclear material will leave Iran," declaring, "These materials are a splendid asset and national wealth for the Iranian people to use at home."
Amid rising military tension among the U.S., Israel and Iran, the Strait of Hormuz remains far from properly open. Iran's Islamic Revolutionary Guard Corps said on Oct. 23 that two very large crude carriers that tried to pass through the Strait of Hormuz outside designated shipping lanes had struck mines. The vessels were found to be carrying more than 4.5 million barrels of crude in total.
Beyond Iran, Yemen's pro-Iranian Houthi rebels, who have been attacking Saudi Arabia day after day, are also seen as possible U.S. targets after the midterms. Houthi spokesman Yahya Saree announced on Oct. 22 that over 48 hours the group had struck the Defense Ministry headquarters in the Saudi capital Riyadh, King Fahd International Airport in Dammam in the east, state oil company Aramco facilities in Yanbu and Abha International Airport with ballistic missiles and drones. "The criminal Saudi enemies have carried out more than 2,900 air and missile strikes targeting civilian infrastructure," Saree said, "causing more than 562 casualties, mainly women and children."
According to Saudi Arabia's civil aviation authority, two people were killed and eight injured at King Fahd International Airport. Reuters reported that Aramco ordered staff at its headquarters in Dhahran on the Gulf coast to evacuate for the first time since the Iran war broke out.
The Saudi military said on Oct. 23 that it had intercepted and destroyed one Houthi ballistic missile headed for Riyadh and two drones that had entered the country's southern region. The Saudi government announced it would postpone until next year both the 10th Future Investment Initiative, the international investment event scheduled for Oct. 26, and the U.N. World Data Forum and the second Saudi Statistics Forum, planned for Nov. 9-12.
U.S. braces for a very long war, with talk of striking the Houthis; escalation possible after the vote
As conditions worsen, Washington's posture toward the Houthis is also shifting somewhat. Only last month, Trump three times rejected requests from Saudi Crown Prince Mohammed bin Salman to strike the Houthis, on grounds that widening the Middle East front would raise oil prices and hurt him in the midterms — a consideration that largely loses meaning the moment the results are in.
Reuters reported on Oct. 21 that "the U.S. State Department is preparing to order the departure of some staff and family members at its embassies across the Gulf region," citing the possibility of a U.S. clash with the Houthis. State Department spokesman Tommy Pigott said on X the same day that the Reuters report was "inaccurate," but confirmed that "the State Department has ordered the departure of U.S. government employees and family members in Saudi Arabia other than essential personnel."
On Oct. 13, Trump said on Truth Social, "A year ago we bombed the Houthis viciously, and when we stopped at their request, I thought they had learned a lesson." He added, "They were quiet for a long time, but now they've reappeared and are attacking Saudi Arabia in a very vicious way." He went on, "It appears to be a deliberate attempt to drive up oil prices ahead of the U.S. elections, on the orders of Iran, a failed state with no navy or air force, the world's worst economy and 301% inflation." Trump stressed, "Someone should explain to them that I am not running in this election," adding, "I will still be here after the election, and I will never forget."
Mike Waltz, the U.S. ambassador to the United Nations, went further, laying out a pessimistic scenario in which the Iran war might not end even a year from now. In an Oct. 22 interview with the FT, Waltz said, "A year from now, the U.S. and Iran could still be in a stalemate without a nuclear deal or normalized passage through the Strait of Hormuz," adding, "I can only hope Iran comes to the table in a meaningful way before then."
Global financial markets are likely to see significant shifts depending on how Trump and Netanyahu change tack after their respective elections. Political circles in Washington see a high probability that Trump will divert the public's attention outward if the midterms do not deliver the result he wants. With Democrats widely expected to retake the House majority, Trump could find himself on the defensive at home amid a wave of hearings. That could dovetail with the interests of Netanyahu, whose political survival hangs by a thread. Military action against Iran is also a card that Saudi Crown Prince bin Salman, having lost so much in security and economic terms, cannot give up. From late this month into early next month, geopolitical risk looks increasingly likely to become an even more decisive variable for crude prices and stock market volatility.
※ "Trump Stocker" is a column delivering on-the-ground reporting and analysis of U.S. markets, companies, policy, politics and diplomacy that can help investors in the era of President Donald Trump. Subscribe to receive useful news from the United States.
