Iran Escalation Triggers Oil Price Spike Amid Hormuz Deal Uncertainty

Oil prices surged after Iran threatened to escalate its attacks against the US in the Middle East, further diminishing hopes for a deal to reopen the crucial Strait of Hormuz.

The comments from Iranian officials were reported by Fars news agency and contradict the optimism surrounding a meeting between Iranian and US officials on the sidelines of the UN General Assembly earlier this week.

Iran has consistently vowed to escalate its attacks against the US if it's struck again, including with new targets and weapons. The country's President Masoud Pezeshkian said at the U.N. meeting that Tehran is ready to resume talks about ending the near seven-month conflict but won't allow freedom of navigation through Hormuz while sanctions and a US blockade remain in place.

Crude oil has climbed over 70% this year as the US-Iran war, along with the fallout from the Russia-Ukraine conflict, have cut supplies and damaged infrastructure. Saudi Arabia's crude shipments in September jumped to the highest level since the start of the war, but fuel markets have been hit harder, heaping pressure onto consumers and boosting inflationary challenges for central bankers.