Oil Price Nears Yearly High: Is a Stock and Crypto Crash Coming?
Brent crude oil surged above $117 per barrel on Friday, October 23, reaching its highest level since April, as fears of a renewed US war with Iran grew.
The immediate catalyst was a new wave of attacks by Iran-backed Houthi forces on Saudi Arabia, which forced Saudi Aramco to evacuate its headquarters and raised concerns about shipping security near the United Arab Emirates.
The broader threat comes from Washington, where reports indicate that the US and Israel have prepared plans for renewed strikes against Iran, potentially targeting energy infrastructure after the November 3 elections.
The White House has stated that no attack will occur before the vote, but military planning does not guarantee that strikes will follow.
Wall Street and crypto react
Thursday offered a warning sign for markets, with the Nasdaq plunging 2.6% and the S&P 500 losing 1.2%, while Bitcoin dropped toward $81,400 as crypto liquidations approached $441 million.
More expensive energy pushes inflation higher, potentially forcing the Federal Reserve to maintain restrictive interest rates.
Rising oil prices add to concerns over enormous AI spending, which has already triggered a selloff in technology stocks, making speculative assets like Bitcoin less attractive.
Midterm elections and market outlook
History offers some reassurance, as MSCI data shows that US stocks gained an average of 12% in the six months following the past 13 midterm elections.
However, the biggest uncertainty this year could emerge after voting ends, with renewed strikes against Iran potentially pushing oil beyond $120 and toward its yearly peak.
For now, the next direction of stocks and crypto may depend more on what happens in the Middle East than on the outcome of the midterm elections.
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