Oil prices soar amid Iran's threat to take the war 'all the way to the Indian Ocean' if the US attacks again

An adviser to Iran's Supreme Leader Mojtaba Khamenei, warned Thursday that Tehran will extend the conflict "all the way to the Indian Ocean" if the United States launches new attacks against Iranian territory, in a verbal escalation that reflects the growing tension between the two countries following weeks of clashes in the Persian Gulf and the Red Sea.

"The front could expand beyond the Indian Ocean"

Yahya Rahim Safavi, a high-ranking military adviser to the supreme leader, said in a video released by the Fars news agency that, "since the conflict has spread from the Persian Gulf and the Strait of Hormuz to the Red Sea (with the Houthis), it is possible that, in response to a potential war, this front could extend even further, to the Indian Ocean or beyond."

This is the first time a high-ranking official close to the supreme leader has explicitly mentioned the Indian Ocean, where the U.S-British military base at Diego Garcia is located, nearly 2,500 miles in a straight line from the Iranian coast.

Oil prices rise amid lack of diplomatic progress

The lack of diplomatic progress at the UN and the escalation of threats between Iran and the U.S. have driven up crude oil prices this Thursday.

Around 9:30 GMT, a barrel of Brent crude for November delivery rose 2.21%, to $105.36, while West Texas Intermediate (WTI) gained 1.73%, reaching $93.75.

For analysts such as Arne Lohmann Rasmussen of Global Risk Management, "An agreement before the U.S. midterm elections seems unlikely." Raising oil prices ahead of that election has become a tool for putting pressure on Tehran, given that fuel prices are a sensitive issue for American voters.

Negotiations stalled after the UN

Negotiations between Washington and Tehran have been at a standstill since a memorandum of understanding failed to materialize. This week, on the sidelines of the UN General Assembly in New York, they resumed indirect talks, lasting about three hours and mediated by Qatar, U.S. envoys Steve Witkoff and Jared Kushner and Iranian Foreign Minister Abbas Araghchi. Trump described the meeting as "productive."

Iran has set seven conditions for an agreement, including the lifting of economic sanctions and the release of its assets frozen abroad. The spokesman for the Revolutionary Guards, Hosein Mohebi, also made any agreement contingent on an end to hostilities in Yemen.