Oil edges higher as markets weigh Iran tensions and fuel supply concerns

The US is reinforcing its military presence in the Middle East as tensions with Iran remain high and diplomatic efforts to end the conflict stall. About 9,000 US sailors and Marines are being deployed, potentially bringing three aircraft carriers to the region. Saudi Arabia has also intercepted a Houthi ballistic missile targeting Khamis Mushait, while explosions were reported in Yemen. Follow all the latest developments here:
Jerusalem: President Donald Trump said Thursday that Iran may be linked to the FlyDubai copilot who tried to crash an Israel-bound plane as investigators worked to determine why the copilot stabbed the flight's captain, causing the plane to plummet before others on board landed it in Saudi Arabia.
Trump was asked by reporters at the White House whether he had been briefed about any links between the pilot behind the attack and Tehran. He said, "We're working on it right now."
"I would say the answer, based on what I'm hearing, is yes, but we're working on it right now," Trump said. He did not elaborate why he thinks Iran might be involved.
Asked if the US would retaliate against Tehran if it was behind the attack, Trump said, "Oh they'll be hit, very hard, don't worry."
"You just ask them," he added. "They know what happened. They'll be hit very hard."
His remarks come as diplomatic efforts to end the war appear to have stalled.
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The US is dispatching roughly 9,000 sailors and Marines aboard a flotilla of warships to the Middle East, a major naval buildup that could bring three American aircraft carriers to the region by late October or November as President Donald Trump warns that renewed strikes against Iran remain possible.
The move, confirmed by US officials who spoke on the condition of anonymity to discuss sensitive military operations and reported by major US media outlets, marks one of the largest concentrations of US naval power in the Gulf and Arabian Sea since the 2003 invasion of Iraq.
It comes as diplomatic efforts to end the eight-month-old US-Iran conflict have stalled, with Tehran and Washington trading accusations and threats even as both sides say they seek to avoid an all-out regional war.
Forty-six sovereign states condemned Iran’s escalating use of the death penalty, saying it is being used “to instill fear, suppress dissent and deter peaceful expression and assembly.”
Liechtenstein delivered the joint statement by 46 sovereign states during the UN Human Rights Council's general debate in Geneva. It was backed by a cross-regional group that includes most of Western Europe plus Canada, Australia, New Zealand, the UK, Ukraine and others. The US is not listed among the signatories.
Oil prices climbed sharply on Friday (Oct. 2, 2026), with Brent crude reaching $102.30 a barrel and Murban crude rising to $109.40, as of 8:06 am Tokyo time. WTI crude was at $93.05. The rally, tracked by OilPrice, came as markets continued to assess disruption risks linked to the US-Iran conflict, the Strait of Hormuz and regional shipping security.
The sharpest move was in Murban, the UAE's flagship crude grade and an important reference for Asian refiners. Its jump above Brent indicates that traders are assigning a higher risk premium to Middle Eastern supply, particularly barrels exposed to Gulf shipping disruptions.
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Loud explosions were heard late on Thursday in the Yemeni capital Sanaa, which is controlled by pro-Iranian Houthi forces, an AFP correspondent said. The Saba agency, which is affiliated with the anti-government fighters, spoke of "Saudi aggression" on X.
AFP footage showed large plumes of smoke rising above the city. After several years of calm, Yemen plunged back into war in July, pitting the Houthi rebels against the government.
The Houthis, who hold Sanaa and Yemen's Red Sea coastline, have been pitted against the government, which is recognised by the international community and backed by Riyadh.
Saudi Arabia’s air defence intercepted and destroyed a ballistic missile launched by the Houthi militia towards Khamis Mushait, the Saudi Civil Defence said.
Fragments from the intercepted missile fell in Khamis Mushait Governorate, causing limited material damage, Civil Defence said. No casualties were reported in the statement.
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At least one Iranian security personnel was killed when unidentified gunmen attacked a checkpoint near Rask, a city in Sistan-Baluchestan province on the border with Pakistan, Iran’s state broadcaster IRIB reported.
The officer was killed as security forces repelled the attack, according to IRIB, citing the province’s deputy governor for security and law enforcement.
“Efforts to arrest the perpetrators of this crime are ongoing,” the official said, according to the broadcaster.
Authorities have not identified the attackers or provided further details about the incident.
US Ambassador to the UN Mike Waltz accused Iran of violating its nuclear obligations by enriching uranium to 60%, saying the level has “no credible civilian purpose”.
He also accused Tehran of restricting access for IAEA inspectors and refusing demands to abandon uranium enrichment.
Iran says its nuclear programme is peaceful and that enrichment is its right under the Nuclear Non-Proliferation Treaty. Tehran has also accused the IAEA of politicisation.
EU member states and the European Commission will hold an emergency meeting Friday to discuss soaring diesel prices and a coordinated response.
The meeting comes after the US urged European allies to release strategic diesel reserves to ease supply disruptions. President Donald Trump has also raised the possibility of restricting US diesel exports.
EU officials warned an export ban could have “very dramatic consequences” for Europe’s economy, while France said it would seek balanced solutions.
US diesel prices have risen more than 70% since the start of the Iran war, reaching an average of $6.39 a gallon, according to AAA data.
The Trump administration has told Germany and France to immediately draw down their emergency diesel inventories to help ease soaring global fuel prices, warning that Washington could impose a targeted ban on U.S. diesel exports if European allies refuse, according to three people familiar with the discussions, Reuters reported.
The demand, delivered through diplomatic and energy channels this week, marks a sharp escalation in transatlantic tensions over energy policy as crude oil trades above $100 a barrel and US diesel prices hit record levels ahead of November’s midterm elections.
US officials have asked the EU to release roughly 120 million barrels of diesel over the next six months, a volume that would represent more than 40% of the bloc’s current emergency oil and diesel stocks, according to a European source and calculations based on Eurostat data from May 2025.
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Asian stocks dropped Friday as investors grow increasingly concerned about surging oil prices and bond yields, while key jobs data later in the day will be pored over for an idea about the Federal Reserve's next interest rate move.
Yields on US Treasuries and government debt in many other major economies spiked Thursday amid fears that the surging cost of energy caused by the Middle East crisis will force central banks to ramp up borrowing costs well into next year.
And while they eased back in early business Friday, angst continues to flow across trading floors, compounded by fresh worries of another flare-up in the US-Iran war.
Both main crude contracts edged up to extend the previous day's rally with Washington and Tehran deadlocked on ending the crisis and unable to reopen the Strait of Hormuz.
The European Union is discussing with the United States and other International Energy Agency (IEA) members whether to release diesel reserves as fuel prices rise, EU Energy Commissioner Dan Jørgensen said on Friday.
Speaking to Euronews, Jorgensen said the EU had used emergency fuel stocks before and could do so again if needed.
European Commission data showed that 12 EU countries have recorded record-high diesel prices since the start of the US war on Iran, including Italy, Belgium, Romania and Poland.
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Lebanese Prime Minister Nawaf Salam said that rebuilding regions destroyed in the latest Israel-Hezbollah war was beyond the state's capacity, calling for funding as he visited the heavily damaged south.
"I am aware of the magnitude of the crisis" including the destruction, displacement and loss of livelihoods, Salam said in Nabatieh, a major southern city hit hard by Israeli airstrikes.
"But the scale of the needs exceeds the capacities of the Lebanese state and its ability to bear these burdens alone," Salam added. "We still need significant funding" for reconstruction, the prime minister said.
Lebanese militant group Hezbollah drew the country into the broader Middle East war in March by attacking Israel, which responded with massive airstrikes and a ground invasion.
The fighting followed another conflict that erupted in 2023 that led to an all-out war the next year. Lebanon has put the overall death toll from these conflicts at more than 8,900.
Hundreds of thousands of people remain displaced, mainly from the south, while Israel maintains troops in a self-declared "security zone" running around 10 kilometres (six miles) inside Lebanon along the border.
French leader Emmanuel Macron urged G7 nations to work together to bring down fuel prices in a call with Trump, as Washington pressures Europe to tap its strategic diesel reserves and threatens curbs on US exports.
"The president stressed that G7 countries had a common interest in acting in a coordinated way, without export restrictions," the French leader's office said after his exchange with Trump.
The appeal came as the European Union's 27 countries were holding crisis talks in Brussels with the European Commission to develop a unified response to US pressure.
"Our European partners should accelerate delivery on their existing commitments and make additional supplies immediately available to address ongoing disruptions," US Treasury Secretary Scott Bessent said in a post on social media Thursday.
"American farmers, truckers, and businesses should not be left carrying the burden of a global diesel shortage."
Macron's office said France intended to convene a video call of leaders of the G7 group of nations, - which also include Canada, Germany, Italy, Japan and Britain - "as soon as possible" to ensure coordination on the matter.
Eurozone inflation jumped to 3.8 percent in September, the highest level in three years, as the war in the Middle East fuelled a surge in energy costs, official data showed.
The figure for the 21-country euro area was up sharply from 3.2 percent in August and remains well above the European Central Bank's two-percent target, raising the likelihood of another interest rate increase.
The September reading published by the statistical office of the European Union was slightly higher than the 3.7 percent forecast by economists for Bloomberg.
As the US war against Iran drags on, the conflict has caused major disruptions to fuel supplies from the Middle East, including from the Strait of Hormuz, a key energy trade route.
Energy price increases surged to 18.8 percent in September, up from 14.3 percent a month earlier, Eurostat said.
Core inflation, which strips out volatile energy and food prices, rose to 2.5 percent last month from 2.4 percent in August.
Meanwhile, food and drinks inflation increased to 1.4 percent from 1.1 percent in August.
Eurozone inflation was last above 3.8 percent in September 2023, when it stood at 4.3 percent.
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The EU pushed back hard Friday against US threats to impose a diesel export ban, as Washington pressures Europe to tap its strategic reserves in a bid to bring down fuel prices.
"We fully reject any ban on diesel. A ban would not be beneficial to anyone. It would undermine our trust in the United States as a reliable partner," European Commission spokeswoman Anna-Kaisa Itkonen said.
The 27-nation bloc was ready to work with the International Energy Agency on the possible release of fuel reserves to contain prices, she added, following crisis talks between member states and commission to forge a unified response.
French President Emmanuel Macron will chair a G7 leaders' videoconference Friday on the risk of global energy shortfalls, the Elysee announced, as the United States urges Europe to tap into its emergency diesel stockpiles.
With fuel prices surging amid the war in the Middle East, the call hosted by France as current G7 president will begin at 2:30 pm (1230 GMT), a French presidential official said. The situation has sparked tensions, with Washington even threatening to ban fuel exports to the European Union if European nations do not release their reserves.
US oil prices dropped sharply Friday as G7 leaders held urgent talks to coordinate action on lowering fuel prices, after the EU said earlier it would work with the International Energy Agency on releasing further stocks to global markets.
West Texas Intermediate was down 4.0 per cent at $89.15 a barrel, having fallen as far as five per cent, while the international benchmark Brent crude was down 2.6 per cent at $99.63 after several days of trading above the psychological threshold of $100 a barrel.
President Donald Trump said Friday that Europe has agreed to release some of its diesel reserves "immediately," as the president and his Republican Party face pressure to address surging prices ahead of November's midterm elections.
Trump announced the action Friday on social media without offering details on which countries were releasing reserves or at what volumes. Trump writes, "Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil." Trump says, "The process will begin immediately."
G7 countries have agreed to release "100 million barrels" of diesel and crude oil from their reserves over the next four months, their leaders said Friday.
The nations agreed to "a coordinated release through the IEA of 100 million barrels to begin immediately over four months," they said in a statement released by French President Emmanuel Macron's office after talks to coordinate action on fuel prices.
EU chief Ursula von der Leyen welcomed Friday a G7 deal that saw off a US threat to impose a ban on diesel exports by coordinating the release of fuel reserves.
"We welcome the decision of G7 countries not to impose any export bans on allies and the continued solidarity between partners. We support an IEA-coordinated release of fuel stocks," the European Commission President wrote on X.
A roadside bomb killed one member of the Revolutionary Guard's Ground Forces in Iran’s Sistan and Baluchestan province, the force’s Southeastern Quds Command said in a statement on Friday.
The IRGC said the explosive was planted along a provincial road by what it called “terrorists,” adding that the attack followed recent clashes in the region in which it said several militants had been killed. It added that operations to identify, pursue and “cleanse” armed groups would continue.
The United States has granted sanctions exemptions for Iranian airlines to operate flights to Iraq's holy city of Najaf, the Iraqi prime minister's office said Friday, despite Washington targeting Iran's aviation sector to choke its economy in the Middle East war.
It said Baghdad had secured "an agreement allowing Iranian airlines, with the exception of Mahan Air, to operate 40 flights daily to and from Najaf", a city sacred to Shia Muslims.
A tanker was struck by an unidentified projectile while sailing outbound through the Strait of Hormuz, causing a small fire and a power outage, UK Maritime Trade Operations (UKMTO) said Friday, citing the ship’s captain.
The fire had since been extinguished and the vessel was underway, with no reported casualties or environmental impact.
Authorities were investigating the incident, UKMTO said. It advised vessels to transit with caution and report any suspicious activity.
Iran’s IRGC is now warning it is fully prepared “with its finger on the trigger” to respond “decisively, immediately, painfully and more lethally than Operation True Promise II” to any US or regional threat, aggression or miscalculation, saying it has comprehensive intelligence on U.S. and Israeli assets and positions, per Mehr News.
Operation True Promise II was Iran’s October 2024 ballistic missile attack on Israel, when Tehran launched around 200 missiles. The IRGC is now explicitly warning that any new confrontation could bring a response even larger and more lethal than that attack.
The warning comes as the US deploys the USS Theodore Roosevelt and Makin Island Amphibious Ready Group toward the Middle East, potentially bringing three US carrier strike groups and two Amphibious Ready Groups near Iran by the end of November.
Yemen's Houthis said on Friday that Saudi forces launched 94 strikes against areas under their control in the past 24 hours, as the pro-Iran group and the Riyadh-backed government clash in the country's revived civil war.
The group said that the number of Saudi strikes on its positions had reached 1,350 since the start of the renewed fighting, saying they targeted areas across Houthi-held Yemen.
Saudi Civil Defence teams in Najran responded on Friday after a hostile projectile launched by the Houthi militia struck a school, causing material damage, an official spokesperson said.
The Civil Defence authorities said standard procedures for dealing with such incidents were carried out.
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