The price of oil surged again on Thursday, with Brent crude surpassing $105 per barrel for the first time since May, as markets brace for a prolonged U.S. war with Iran.

U.S. crude oil also jumped sharply and hit $100 per barrel, also its highest level since mid-May.

A primary driver of the move in oil prices was President Donald Trump’s comment Wednesday night that he is not looking for a deal with Iran. Trump also said that he did not expect oil prices to fall until “right after” the November midterm elections, despite having said for months that the war would be over quickly.

“Right after the election, oil prices are going to be tumbling downward,” Trump told reporters on Wednesday afternoon. “They’re going to be tumbling down, and we’ll get them down.”

Commodities experts warned earlier this week that oil prices as measured by Brent could rise to $120 or even as high as $150 per barrel if the stalemate with Iran continues to drag on.

Overnight, Saudi Arabia informed OPEC that its crude oil output plunged to the lowest level since 1990 last month due to renewed hostilities with Iran, according to Bloomberg News.

NBC News was not immediately able to confirm that report.

“The move reflects a market still pricing in persistent geopolitical risk, with Persian Gulf tensions showing no credible path to de‑escalation,” said analysts at ING on Thursday.

As a result of those rising prices, the national average gas price rose another 5 cents overnight to $4.27. Diesel fuel, which powers everything from farms to trucking to trains, rose 3 cents overnight to $5.97.

Meanwhile, U.S. Treasury bonds continued to sell off, driving their yields higher. The 10-year Treasury yield, which heavily influences consumer borrowing rates especially for mortgages, touched 4.9%, its highest level since 2023.

The 30-year Treasury yield spiked to 3.34%, its highest level since 2007.

The move in Treasury yields was driven mostly by the soaring price of energy, which has triggered renewed fears of an inflation crisis.

But rising yields may also be attributable to a pledge by Trump on Wednesday night to give a $5,000 “rebate” to all U.S. adults if Republicans retain the House and Senate in November. While details of the pledge remain unclear, it would cost more than $1 trillion and could add to the country’s already significant debt pile.

Rising yields and oil prices sent U.S. stocks tumbling. The S&P 500 fell 0.6%, the Nasdaq Composite fell 0.8% and the Dow Jones Industrial Average fell 200 points.

On Thursday morning, the Bureau of Economic Analysis reported that wholesale business inflation rose 0.4% from June to July. On an annual basis the Producer Price Index rose 5.4% from a year ago. PPI is often viewed as an early warning signal for what may happen with consumer inflation, which will be released on Friday.

Concerned with inflation, Federal Reserve policymakers will be closely watching the figure to determine if they should hike U.S. interest rates in their next policy meeting next week.

“If inflation comes in hot, I would consider a rate hike,” said Federal Reserve governor Christopher Waller last week. But he also said there remained “considerable uncertainty” regarding how the Iran war, Ukraine war, and ongoing trade wars would continue to impact the economy.

In Europe, where gas prices surged to their highest levels since 2023 on Wednesday, the European Central Bank hiked rates for the eurozone on Thursday. It cited inflation as trigger behind that decision.

“The conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period,” the ECB’s governing council said in a statement. The ECB also raised its inflation forecast for the next two years due to the energy shock.

European Central Bank president Christine Lagarde told reporters that “extended period” meant at least into “the first half of 2027.”

Lagarde said it was not just the war in Iran pushing prices higher either. “The conflict in the Middle East and recent developments in Russia’s unjustified war against Ukraine have pushed the path of energy prices up further,” she said.

“The outlook remains highly uncertain, with risks to the upside for inflation and to the downside for economic growth,” the ECB said.

After the ECB’s rate decision and the PPI data release, market odds for a Fed rate hike next week rose to about 75%.