Oil prices soar after Joe Biden’s comments on Israeli retaliation

Good morning. Today we’re covering:

• A rare corruption sentencing in Singapore

• An apparent U-turn by Japan’s new PM

• What it takes to buy foreign influence in America

But first, oil prices surged to their highest level in more than a month yesterday as traders speculated that Israel could engage in retaliatory strikes against Iran’s oil industry.

Brent crude rose by more than 5 per cent to settle at $77.62 per barrel after US President Joe Biden told reporters that such a move was under discussion in response to Tuesday’s missile attack on Israel by Iran.

Asked whether the US would support Israel striking Iran’s oil facilities, Biden said: “We’re in discussion of that.”

In recent days, senior US officials have held a series of conversations with top Israeli officials, as the US and western allies try to limit the scope of Israel’s response and prevent a broader regional conflict.

US officials believe Israel’s retaliation will be measured enough to avoid triggering new rounds of escalation across the Middle East. But concern is growing among US allies that Washington is struggling to influence the Israeli government led by Prime Minister Benjamin Netanyahu.

We have more insights below on the oil market and the escalating conflict in the Middle East:

• More oil news: Libya said it would resume full oil production following the resolution of a dispute between rival political factions in the country. The move should return about 700,000 barrels a day of crude to the global market.

• Lebanon: Israel launched multiple air strikes on Beirut yesterday, killing at least nine people at a Hizbollah-linked medical facility in the heart of the city.

• Extensive damage: Israel’s escalating bombardments of Lebanon have damaged or destroyed an estimated 3,100 buildings since September 20, according to satellite data, and killed over 1,300 people in the country.

• Military Briefing: Can Israel’s land offensive “defeat” Hizbollah? The IDF has devastated the militants from the air but success on the ground may require a much longer campaign.

Here’s what else I’m keeping tabs on today and over the weekend:

• Economic data: Singapore publishes August retail sales and the US reports September jobs figures. The latest HSBC services PMI data for India is also due.

• EU-China trade tensions: The EU’s 27 member states are expected to vote today on whether to impose sharply higher tariffs on EV imports from China.

• Asean summit: Laos hosts a gathering of the Association of Southeast Asian Nations, which starts on Sunday.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Singapore’s former transport minister S Iswaran has been sentenced to one year in prison for accepting more than $300,000 in gifts as a public servant and obstructing justice. Iswaran, who was instrumental in bringing the Formula One Grand Prix to Singapore, becomes the city-state’s first cabinet official to be imprisoned in nearly 50 years.

2. Exclusive: Two affiliated China-based drug manufacturers targeted by forthcoming US national security legislation are working on sales of some of their operations. WuXi AppTec and WuXi Biologics are among five China-based companies targeted by the Biosecure Act, which would ban drugmakers with US government contracts from using the Chinese groups’ services after 2032.

3. An apparent policy U-turn by Shigeru Ishiba, Japan’s new prime minister, have rekindled market bets on the yen “carry trade” and sent the currency to a six-week low. Ishiba said yesterday that the Japanese economy was “not in an environment” for further interest rate rises by the Bank of Japan. Ishiba’s blunt remarks appeared strongly at odds with his previously more hawkish tone.

4. Republican Senate candidate Larry Hogan has attacked JD Vance’s refusal to acknowledge Donald Trump’s 2020 election defeat as “crazy”. In an interview with the FT, Hogan said he was also concerned about the former president questioning the results of next month’s presidential election.

5. Blackstone president Jonathan Gray said an accelerating recovery in most of the commercial property market would not be enough to save some over-indebted owners from having to take losses, mainly on offices. “Most of the losses will happen in the equity market, but there will be banks,” he said. Read the full story.

The Big Read

Nanjing-style salted ducks and a gleaming Mercedes-Benz C 300 convertible are just some of the colourful and expensive kickbacks used by foreign powers to curry favour in the halls of American power. They have come to light in a series of recent indictments by the US justice department using a little-known piece of legislation designed to curtail the influence of Nazi-backed officials in the run-up to the second world war.

We’re also reading . . . 

Map of the day

The UK has agreed to give up sovereignty of the Chagos islands to Mauritius in return for securing the future of a UK-US military base situated on Diego Garcia. The deal comes after 50 years of wrangling over the remote but strategically important archipelago of 58 islands, which lie approximately halfway between east Africa and Indonesia.

Take a break from the news

It seems everyone has a podcast these days . . . including Nicolai Tangen, head of Norway’s $1.6tn oil fund, whose show has featured other top bosses from Goldman Sachs’ David Solomon to X’s Elon Musk. Today’s recommended read by management editor Anjli Raval explains why there are so many CEO podcasters.

Additional contributions from Gordon Smith and Tee Zhuo