Oil prices jumped sharply Thursday as reports of possible renewed U.S. and Israeli military strikes on Iran, combined with a U.S. order pulling nonemergency government staff out of Saudi Arabia, sent traders scrambling. Brent crude futures climbed 2.8% to $111.81 a barrel, while West Texas Intermediate gained 1.7% to $98.83 after briefly breaking above $100 earlier in the session. The jump came alongside a tech-stock selloff fueled by mounting worries over the cost of financing artificial-intelligence infrastructure.
According to CNBC, the oil-price surge followed reports that Trump hinted at potential action on Iran while the U.S. ordered staff to leave Saudi Arabia. Separately, The New York Times reported that U.S. and Israeli militaries have developed specific plans for renewed strikes against Iran after the American midterm elections, with likely targets including Iran's energy infrastructure, nuclear facilities, and its missile and drone arsenal. The planned operation is described as short but intensive.
The renewed strike planning comes after what oil traders had treated as roughly a month-long pause in U.S. strikes on Iran, now reportedly giving way to fears of a fresh escalation, as detailed in the New York Post. Iranian officials, per the Times report, have also threatened to expand retaliatory targets beyond commercial ships and regional energy infrastructure to include data centers and underwater internet cables.
Saudi Departure Order Tied to Houthi Attacks
The State Department ordered nonemergency government employees and their families to leave Saudi Arabia, according to CNN. State Department spokesperson Tommy Pigott said the move was prompted by increasing hostilities from Iranian-backed Houthi forces against Saudi Arabia, including attacks on civilian airports and critical infrastructure.
The Saudi drawdown adds another layer of uncertainty to a region already bracing for the fallout from the first phase of U.S.-Israeli strikes earlier this year. Those rounds of fighting, which ran from February through April, drove up energy prices and inflation worldwide, the Times reported. National average gasoline prices have remained above $4 a gallon in the months since, per the seed reporting.
Echoes of Spring's Pump-Price Shock
The current spike recalls the aftermath of the February strikes, when U.S. average gasoline prices rose above $4 a gallon for the first time in more than three years, according to Reuters. National retail gasoline prices climbed about $1.06 a gallon, or 36%, in the weeks after the U.S. and Israel attacked Iran at the end of February, in what Reuters described as the steepest monthly increase in GasBuddy data going back to 2000. U.S. oil futures settled above $100 a barrel during that stretch and stayed near that level for days.
Higher crude prices tend to ripple quickly into fuel costs because crude is typically the largest input cost for producing petroleum products, according to the U.S. Energy Information Administration. Still, the economic fallout from today's elevated prices may be less severe than in past decades, per the CNBC report, since consumers are less exposed to energy shocks than before. Gasoline accounted for roughly 5% of the average American's disposable income a decade ago, compared with about half that today, according to data cited in the same report.
AI Spending Fears Pile On
Even as oil dominated headlines, technology stocks weakened on separate worries about the cost and financing of AI infrastructure. Nvidia CEO Jensen Huang told CNBC that demand for neocloud firms — companies that earn revenue by renting computing capacity to power data centers, per the seed reporting — is “off the charts,” but that scarce capital is holding back growth. Huang said the demand for capital in AI is far greater than its availability, with power availability also a major constraint, particularly in Europe.
Neocloud stocks including CoreWeave and Nebius have been selling off recently amid concerns about AI infrastructure spending and longer-than-expected investment returns, the CNBC report noted. Meta, meanwhile, reported third-quarter revenue of $64.6 billion, up 26% from a year earlier, while costs jumped 68% to $51.6 billion, according to The New York Times. The company's free cash flow turned negative, dropping to negative $2.12 billion for the three months ended September 30, even as Meta raised the floor of its 2026 capital-expenditure plans to $135 billion from $130 billion.
Despite the pressure on capital, Huang expressed confidence that the shortage would eventually be resolved, per the seed reporting. For now, the combination of war fears in the Middle East and anxiety over AI spending has left markets on edge, with both energy prices and tech valuations swinging sharply in the same trading session.
