Brent crude climbed to $106.83 a barrel on Thursday, up 5.6% on the day, after U.S. Central Command said it destroyed five Iranian oil tankers following missile attacks on a Navy warship. The move pushed Treasury yields to multi-year highs and raised the odds traders assign to a Federal Reserve rate increase next week.
Brent crude traded at $106.83 a barrel on Thursday afternoon, up 5.6% on the day and its highest level since May 19. The contract has risen 11.7% since Sept. 2, when it settled at $95.63.
Five Tankers Struck Near Hormuz
U.S. Central Command said its forces destroyed five Iranian crude oil carriers on Sept. 8, after the Islamic Revolutionary Guard Corps targeted a U.S. Navy warship with ballistic missiles twice over the previous two days, according to the command's public release. The release names the M/T Kaviz, M/T Charminar, M/T Horizon 1, M/T Riesco and M/T Derya, placing four of the strikes in the Gulf of Oman and one near Kharg Island. A Sept. 5 release describes three earlier tanker strikes.
The U.S. Maritime Administration published advisory 2026-011 on Sept. 9, stating that Iran continues to threaten and conduct strikes on commercial vessels transiting the Persian Gulf, Strait of Hormuz and Gulf of Oman. The advisory replaced one that expired the same day, a scheduled six-month renewal rather than a response to this week's strikes.
Energy Information Administration's weekly petroleum status report for the week ending Sept. 4 was due to publish at noon ET Thursday, delayed from Wednesday by the Sept. 7 federal holiday. Its most recent report, for the week ending Aug. 28, recorded commercial crude inventories down 4.5 million barrels to 424.5 million, a figure that predates both sets of strikes.
Oil Shock Pushes Up Rate Hike Odds
The oil move sits underneath a broader shift in interest rate expectations. Traders raised the odds of a quarter-point Federal Reserve increase next week to 64%, up from 52.5% at 8 a.m. ET Thursday. That followed a Bureau of Labor Statistics report that producer prices for final demand rose 0.4% in August, against 0.1% in July.
Thadeu Dos Santos, regional director at brokerage Infinox, said the figures reinforced concerns that inflation remains persistent, given elevated oil prices and a labor market that has proved more robust than anticipated, in commentary sent to The Defiant on Thursday morning.
Bond yields moved with it. The 10-year Treasury yield reached 4.92% on Thursday, its highest since Oct. 25, 2023. The 30-year reached 5.34%, above every daily close of the past five years.
Equities And Gold Slip
The S&P 500 traded at 7,606 on Thursday afternoon, down 0.4% from Wednesday's close, while gold was at $4,405 an ounce, down 1.3%. An oil shock also drove long-dated Treasury yields higher and sent crypto lower, with Bitcoin changing hands at $77,120, down 2.1% over 24 hours.
Source: The Defiant
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