Meanwhile, Trump says gasoline prices won't fall until after November: File Image/Pixabay.

As of mid-session Thursday, oil traders’ full appreciation of the prospect of Washington and Tehran never reconciling their differences caused crude prices to surpass $106 per barrel for the first time since May.

The main motivation for the upward trajectory was U.S. president Donald Trump, who said he didn’t expect oil prices to fall until “right after" the November midterm elections; by which point he claimed  victory in the war with Iran would cause gas prices at the pump to plunge by half.

Meanwhile, traders anticipated a report due Friday showing how much inflation U.S. consumers are coping with; a report released Thursday pegged inflation at the U.S. wholesale level rising to 5.4 percent in August compared to 4.8 percent the month prior; this suggests that retailers may be compelled to pass on the increases to shoppers, causing a drop in demand, and that the U.S. Federal Reserve will raise the federal fund rate at its meeting next week.

The prospect was worrisome to analysts, considering that on Thursday the European Central Bank raised its own interest rates, citing “the conflict in the Middle East” and how it “continues to generate inflation pressures.”

Also on Thursday, HSBC raised its Brent 2026 forecast to $90 from $80 per barrel, declaring that oil markets are unlikely to rebalance until the middle of 2027 (according to analyst Kim Fustier).

Fustier also forecasted that oil transits through the Strait of Hormuz will rise to about 8 million barrels per day (bpd) by the end of this year, up from 6 million bpd currently; this is below pre-war levels of about 19-20 million bpd.

Fustier concluded that flows would grow to 9.5 million bpd by mid-2027 and noted this would mean continued market tightness for nearly another year.

As for the war itself, media reported on Thursday that Tehran has started producing ballistic missiles at underground facilities with stockpiled components; also, the United Nations’ International Atomic Energy Agency director Rafael Mariano Grossi told media that Pickaxe Mountain, Iran’s suspected underground nuclear site, was experiencing increased activity.