Oil prices spiked Thursday as investors fear escalation in the Middle East with the U.S. reportedly planning to resume strikes against Iran.
Brent crude futures hit $113.40 per barrel, the highest level since May 5. The international benchmark was last up 4% to $113.25 a barrel. U.S. West Texas Intermediate gained 3% to $100.06. Â
The U.S. and Israeli militaries have drawn up specific plans for renewed strikes on Iran after next month’s midterm elections, unnamed U.S. officials told The New York Times. Planning for a “short but intensive” operation is progressing, the officials said.
President Donald Trump subsequently said the U.S. is not negotiating with Iran when asked by a reporter late Wednesday. Trump said “something one way or the other” will “happen fairly soon” on Iran without elaborating.
“Most people seem to think it’s after the election,” Trump said. “We’re going to see what happens.”
The U.S. has also ordered non-emergency government employees and their families to leave Saudi Arabia. State Department spokesman Tommy Pigott in a post on X said the order applies only to Saudi Arabia, dismissing reports that the U.S. had directed some staff in the wider Gulf region to leave.
Pigott pointed to escalating attacks by Iran-allied Houthis on civilian targets in Saudi Arabia as the reason for the order. At least two people were killed and eight injured in an attack on King Fahd International Airport in Dammam on Saudi Arabia’s East Coast Wednesday, according to Saudi state media.
Meanwhile, oil giant Saudi Aramco has told staff to evacuate its headquarters in Dhahran and work remotely, people familiar with the matter told Reuters Thursday. Aramco facilities have repeatedly come under attack by the Houthis.
The economic fallout from elevated oil prices, however, may be less severe than in previous decades, as consumers have become less vulnerable to energy shocks, according to David Wagner, head of equity and portfolio manager at Aptus Capital Advisors.
“$100 oil today is very different than $100 oil, you know, 20, 30 years ago,” Wagner said, noting that crude prices remain well below their inflation-adjusted historical highs.
He pointed to U.S. government data showing that gasoline accounted for roughly 5% of the average American’s disposable income a decade ago, compared with about half that today, suggesting households may be better positioned to withstand elevated energy costs.
“I think we can hold that umbrella over our head … from the rainstorm of oil,” he said.
— CNBC’s Anniek Bao contributed to this report.
