Oil Nears Yearly High, Adding to Stock and Crypto Woes

Oil prices are approaching their yearly peak, and the timing could not be more unfavorable for financial markets. With Wall Street already under duress and Bitcoin sharply lower, investors now face the risk of a renewed US war with Iran after the elections.

Brent crude reached $117.42 a barrel on Friday, October 23, its highest point since April. Several factors are fueling this rise:

• Recent attacks by Iran-backed Houthi forces on Saudi Arabia acted as the immediate catalyst.
• Saudi Aramco evacuated its headquarters as the fighting escalated.
• An oil spill near the United Arab Emirates raised concerns about maritime security.
• The larger worry originates in Washington. The US and Israel have reportedly formulated plans for renewed strikes against Iran, possibly targeting energy infrastructure after the November 3 elections.

The White House states that no attack will occur before the election. Military planning does not necessarily mean that strikes will be carried out.

BREAKING: Brent crude oil prices surge above $117/barrel for the first time since March 19th amid fears that the US will renew strikes on Iran.

Brent crude oil is now $2 away from breaking above its high of the year.

Inflation expectations are pushing higher.

— The Kobeissi Letter (@KobeissiLetter) October 23, 2026

What Is Driving Stocks and Bitcoin Lower?

Thursday served as a warning. The Nasdaq tumbled 2.6%, while the S&P 500 slid 1.2%. Bitcoin slipped toward $81,400 as crypto liquidations reached nearly $441 million.

Concerns about vast AI spending were behind much of the technology sell-off. Higher oil prices added an extra strain.

More costly energy can drive inflation higher, potentially forcing the Federal Reserve to maintain elevated interest rates. This endangers company profits and makes speculative assets like Bitcoin less attractive.

Friday delivered a mixed picture: the Nasdaq improved slightly while the Dow slipped.

Could the Midterms Lead to Another Market Decline?

Historical data offers some comfort. MSCI indicates that US equities gained an average of 12% in the six months following the past 13 midterm elections.

Still, this year's biggest unknown could materialize after voting is over.

Renewed attacks on Iran could push oil beyond $120 and near its yearly high, heightening the potential for another inflation-induced sell-off. A de-escalation could reduce oil prices and facilitate a rally.

For now, the outlook for stocks and crypto may be determined more by Middle East events than by the congressional election result.