The United States and Israel have drafted plans for potential military strikes against Iran following the Nov. 3 midterm elections, with target options including Iranian energy infrastructure and nuclear sites, according to a report by The New York Times. The military planning comes as Brent crude oil trades near $109 a barrel, according to Investing.com data, keeping global commodity markets and macroeconomic sentiment on high alert.
Target Options and Military Buildup
Reported targets under consideration include energy infrastructure and Pickaxe Mountain, a nuclear facility buried deep in granite. According to The New York Times, the full US military buildup—which features three aircraft carriers—will not be complete until early November. Although US President Donald Trump halted a military attack shortly before launch earlier this month to avoid driving up gas pump prices, officials told the Wall Street Journal in September that Trump expects to resume bombing campaigns after the vote.
Political dynamics in both countries could impact the execution of the plans:
- Oct. 27 Election: Israel holds elections on Oct. 27; experts note that if Prime Minister Benjamin Netanyahu loses, his caretaker status would restrict his power to initiate war.
- Congressional Control: Nate Silver's model gives Democrats a 94% chance of taking the House of Representatives, though Trump has dismissed many polls as rigged.
- Iranian Defense Response: Mahdi Mohammadi, a senior adviser to Iran's negotiator, characterized a proposed 72-hour US campaign as a fantasy.
Market Spikes and Geopolitical Risks
Energy markets have repeatedly reacted to military escalations. Brent crude rose 27.9% in the week after the US and Israel launched the war on Feb. 28, remaining nearly 50% above its pre-war close. On July 8, Brent settled 5.2% higher when US strikes resumed following a truce, while an Oct. 8 price jump largely survived Trump's pledge not to strike before the election, as reported by NBC News. Although Gulf exports surpassed pre-war levels in the week ending Oct. 18, Brent continues to trade near $109.
Tehran analyst Peiman Salehi told The New York Times that Iran's retaliatory response would target Saudi refineries, describing oil prices as Tehran's "best lever against Trump." Furthermore, the correlation between oil prices and bond yields has reached its highest level since the 1990s. This tightening relationship shows how geopolitical supply shocks flow directly into broader financial markets as macro headwinds weigh on crypto and traditional equities.
Why It Matters
Potential strikes on Iranian energy infrastructure threaten to spark a fresh supply shock in global crude markets at a time when inflation concerns persist. An immediate surge in crude past $109 would likely drive bond yields higher, placing renewed downward pressure on risk assets across the financial spectrum. With institutional investors assessing macro risks alongside broader macroeconomic pullbacks, any prolonged disruption to Persian Gulf energy channels could severely restrict global market liquidity.
