Brent tops $116 as market eyes weekend Iran escalation

Brent crude traded above $116 a barrel on the day, gaining more than 2.5%, as traders anticipate a possible strike on Iran over the weekend.

The conflict is not unfolding according to Trump's strategy, and Republican approval ratings and polling figures look weak. Furthermore, Israeli Prime Minister Benjamin Netanyahu faces a low chance of staying in office after Tuesday's vote, with odds at about 30%.

The US president laid out the approach 14 years ago himself.

According to reports, the strike may be brief, possibly targeting Pickaxe Mountain and a number of missile sites. My assessment is that Trump would launch an attack and then attempt to claim victory early next week, shifting the narrative in a conflict that lacks public support. The difficulty, however, is that oil prices are not helping, making that a hard case to make.

A major unknown is what Iran holds back and the extent of its retaliation. This week saw multiple warnings about potential actions such as severing undersea cables, striking data centers, targeting US military installations in the region, and hitting Gulf energy facilities. US strikes could cross that threshold and trigger the cycle of escalation that has persisted for some time.

One reason for cautious optimism is that details of the attack seem to be leaking. This suggests Iran may also be aware, or the operation might have been deliberately signalled. Ultimately, it could be largely symbolic, similar to many previous exchanges between Iran and Israel over recent years.

In the end, this is all conjecture. What we have observed from Trump this year is that there is no fixed strategy, only spur-of-the-moment decisions, and analysis need not extend beyond his 14-year-old tweet. His goal, should he order an attack, is probably to change the situation and seek an exit from a difficult stalemate.

For those betting on lower oil prices, there is some positive development: a three-way meeting involving Ukraine, Russia, and the United States is scheduled for early November. Zelensky's recent remarks have shifted in tone, potentially signaling a window for peace.