Oil Rises as Mideast Tensions Sustain Supply-Disruption Fears

By Ronnie Harui

Oil prices rose Friday morning on persistent supply fears amid continuing tensions in the Middle East, while Asian government bond yields fell, tracking a retreat in U.S. Treasurys from multiyear highs.

The Pentagon is sending a third aircraft-carrier strike group and additional Marine Corps ships to the Middle East, adding 9,000 to 10,000 more troops to the region as President Trump considers renewing strikes on Iran after the midterm elections, according to a Wall Street Journal report.

"The prospect of renewed attacks by the U.S. were heightened," ANZ Research analysts said, citing the Journal report. "President Trump is also said to have told aides that he expects to resume bombing of Iran. This comes as the U.S. ramps up economic pressure on Iran through the continued blockade of Iran's ports," the analysts added.

Barclays raised its fourth-quarter Brent crude forecast by $20 to $115 a barrel, bringing its full-year 2026 projection to $100 per barrel.

Front-month West Texas Intermediate crude oil futures were recently up 0.3% at $93.14 a barrel, while front-month Brent crude oil futures were up 0.4% at $102.76 a barrel, ICE data showed.

Yields on government bonds across Asia-Pacific fell in the wake of Thursday's decline in Treasury yields after another Fed official suggested the next rate increase could wait. The 10-year Treasury yield hit a 24-year high of nearly 5.34% overnight, before reversing course to finish down 0.059 percentage point at 5.233%, its biggest drop in over a month.

Fed Vice Chair Philip Jefferson said Thursday that officials may need more time before determining whether to raise rates again, mirroring remarks by New York Fed President John Williams, who said Tuesday that there was "no need for urgency" following September's rate increase.

"Multiple Fed officials struck a patient tone on Thursday, collectively signaling a preference to hold rates steady at the" Federal Open Market Committee meeting this month, UOB's Global Economics & Markets Research team said in a report.

The yield on Japan's 10-year government bonds fell 4.5 basis points to 3.050%, according to data provider Quick. Yields on Australia's 10-year sovereign debt dropped 6 basis points to 5.346% and New Zealand's 10-year declined 5 basis points to 5.056%, based on FactSet data. Meanwhile, the 10-year Treasury yield edged 2 basis points higher to 5.254%.

Regional equity markets were mixed, with markets in mainland China closed for a public holiday. Japan's Nikkei Stock Average was down 0.7%, South Korea's Kospi was up 0.3% and Australia's S&P/ASX 200 index was 0.5% higher.

Write to Ronnie Harui at ronnie.harui@wsj.com

(END) Dow Jones Newswires

October 01, 2026 21:49 ET (01:49 GMT)