Brent crude, the international benchmark, jumped 3.8% to $104 a barrel in Thursday trading, pushing investors out of bonds and equities worldwide. Two supply threats drove the move: escalating attacks on shipping in the Strait of Hormuz and the approach of the Atlantic season's first hurricane on Gulf of Mexico output.

Middle East tensions cut tanker traffic

Attacks on tankers in the strait of Hormuz reached their highest levels of the war, cutting traffic through the waterway, according to the report. The conflict against Tehran is now in its eighth month.

On Wednesday, UK Maritime Trade Operations reported that a tanker was hit by multiple projectiles off the north coast of Qatar, causing casualties.

• •The White House has asked the Pentagon to draw up options for strikes against Iran before the US midterm elections, according to The Atlantic
• •Unnamed officials in Donald Trump's administration said the size and targets of potential strikes, and whether they will go ahead, are still being debated
• •A "limited operation" could be followed up by more substantial action after the midterms

Hurricane Isaias squeezes Gulf production

Tropical storm Isaias strengthened to become the first hurricane of the Atlantic season, squeezing Gulf of Mexico production.

Shell and Chevron both said they were shutting down production as the storm approached. It was forecast to make landfall on Friday or Saturday. Maersk said on Thursday it was increasing its emergency fuel surcharge on all its export collections and import deliveries.

Bonds and stocks sell off

The rise in energy prices has fed fears about inflation, reinforcing expectations that central banks will raise interest rates. Yields climbed across major government bond markets:

• •The UK 30-year gilt yield rose by 3 basis points to 6.0117%, after touching 6.036% on Wednesday, the highest since January 1998
• •The UK 10-year gilt yield rose by 5 basis points to 5.48%
• •France's 10-year yield rose by 6 basis points to 4.931%, just behind the 24-year high of 4.994% hit last week
• •The German 10-year yield, the benchmark for European debt, rose by 2 basis points to 3.504%
• •The US 10-year treasury yield rose by 5 basis points to 5.331%

Equity markets also fell. Japan's Nikkei share index dropped 1.4% and the South Korean Kospi was down 2.6%. In early Thursday trading, the Stoxx Europe 600 fell 0.9% and the UK's FTSE 100 slipped by 0.4%.

Per the report, the scale and targets of any potential strikes against Iran, and whether they will proceed, remain under debate within the administration, while the storm was forecast to make landfall on Friday or Saturday.