Oil Prices Rise Amid Middle East Tensions, But Elections Loom Large

Oil futures rose by nearly 2% at the start of this week's trading, following a decline of more than 4% in sideways trading. The price increases come amid renewed skirmishes in the Middle East, where non-escalatory attacks have limited gains. According to Central Command, the US carried out an attack on Iran's Larak Island, targeting rocket launchers prepared to fire missiles loaded with naval mines toward the Strait of Hormuz.

The Revolutionary Guard said it launched missiles toward US targets in Jordan, while President Donald Trump claimed an attack on Kharg Oil Island, but no evidence was provided. The US appears to be trying to maintain a balance: allowing oil to continue flowing through the strait as quickly as possible while protecting tankers, without being dragged into broad escalation.

With midterm elections approaching in the United States, extremely high prices for gasoline and diesel exceeding four dollars are a concern. The average price of a gallon of diesel stands at 5.6 dollars, representing a rise of more than 50% from last year's average, according to AAA Fuel Prices data.