THE TANKER WAR IS NOW POLICY, AND OIL HAS NOTICED

• Iran has sharply accelerated construction at Pickaxe Mountain. A new Center for Strategic and International Studies (CSIS) satellite analysis, shared with CNN, finds "a clear surge in construction activity" this year at the granite-buried site near Natanz, which analysts believe is designed as a safe haven for Iran's nuclear programme 7CNN ‘Surge in construction’ at suspected Iranian nuclear site, analysts say, as US considers ways to strike deep underground. Israeli intelligence has suggested Iran may move centrifuges there, and the granite makes it a difficult target even for the Pentagon's heaviest non-nuclear bombs. The detail most people will miss: four days before the war began, a Pentagon counter-proliferation agency signed an emergency contract to repair an underground test facility at White Sands for a live-fire test "designed to validate classified capabilities," which sources tied to targeting Iran's deepest sites 7CNN ‘Surge in construction’ at suspected Iranian nuclear site, analysts say, as US considers ways to strike deep underground. Somebody has been planning for exactly this problem since February.

• Israel hit back at Britain hard and fast. Foreign Minister Gideon Sa'ar is closing the British consulate in Jerusalem, removing British staff from the Gaza coordination headquarters in Kiryat Gat, ending UK training of Palestinian Authority security forces and barring 12 Britons, including MPs Jeremy Corbyn and Diane Abbott, from entering Israel 16YNT Israel hits back at UK sanctions, closes Jerusalem consulate. "Whoever acts against Israel, Israel will act against them," he said 16YNT Israel hits back at UK sanctions, closes Jerusalem consulate. The UK was not alone: 12 countries, including France, Canada, Spain, Ireland, Norway, Poland and Sweden, signed a joint statement pledging settlement trade restrictions 16YNT Israel hits back at UK sanctions, closes Jerusalem consulate. Sa'ar says Israel may target the others too.

• Pakistan says the Houthi strikes "could trigger" a mutual defence pact. Defence Minister Khawaja Asif said that under the trilateral Mecca Defence Pact signed last month by Saudi Arabia, Pakistan and Turkey, "any aggression against any of the three is regarded as an aggression against all" 1CRD Pakistan threatens Yemeni strikes on KSA ‘could trigger’ Mecca defense pact. Meanwhile The Cradle reports at least 32 Saudi airstrikes across Marib, Taiz, Hodeidah and Al-Jawf, and the Houthi military blames a Saudi F-15 for a strike on a prison in Al-Jawf that killed at least 16 people 1CRD Pakistan threatens Yemeni strikes on KSA ‘could trigger’ Mecca defense pact. A Yemen escalation that formally pulls in Islamabad and Ankara would be a very different war.

• Amnesty says three US-Israeli strikes on Tehran may be war crimes. The attacks in March killed at least 41 civilians in crowded neighbourhoods, and while the targets (police stations and paramilitary compounds) may have been lawful, Amnesty says the harm to surrounding apartment blocks was "entirely predictable" 17ABC Three attacks in Tehran could 'amount to war crimes', report finds. It also wants an independent investigation into the first-day strike on a school in Minab that killed 150 people, 120 of them children 17ABC Three attacks in Tehran could 'amount to war crimes', report finds.

• The UN chief wants Israel out of Lebanon, and the IAEA chief wants his job. António Guterres condemned Israel's "escalation" in Lebanon and called for its forces to withdraw, ahead of his final General Assembly 6JPM UN Secretary-General Guterres condemns 'Israeli escalation' in Lebanon, calls for IDF withdrawal. One of the seven candidates to replace him is Rafael Grossi, the International Atomic Energy Agency (IAEA) head who told his board this week the agency is blind in Iran 6JPM UN Secretary-General Guterres condemns 'Israeli escalation' in Lebanon, calls for IDF withdrawal. That does not make his warnings wrong, but it is worth knowing that the man delivering them is also campaigning for a job the Security Council is already straw-polling.

Markets think this got worse, and they are pricing it as an inflation problem, not just an oil problem. Brent jumped about 3.5 percent in a day to cross $100. Heating oil, a proxy for diesel, rose more than 4 percent.

European stocks took the hit hardest: the DAX fell about 1.7 percent and the FTSE 100 about 1.3 percent. The US 10-year yield rose to 4.85 percent, and the European Central Bank is expected to raise rates on Thursday with the Federal Reserve meeting next week 2AJE Brent crude surpasses $100 a barrel as Iran, US escalate attacks. Expensive energy plus rising rates is the combination that squeezes households and governments at the same time.

The odd one out is defence. Lockheed Martin, BAE Systems and Rheinmetall all fell 2 to 4 percent on the day of the escalation. The market is not reading this war as a procurement boom. It is reading it as a cost.

Americans have now paid an extra $100.9 billion for petrol and diesel since the war began, about $770 per household, according to a Brown University tracker 14CNN Americans are footing a $100 billion energy bill from the Iran war. Diesel is at an all-time record of $5.90 a gallon, up more than 60 percent this year, and petrol hit a three-month high above $4.15 on Tuesday 14CNN Americans are footing a $100 billion energy bill from the Iran war. One Gulf Oil adviser expects "the most expensive" autumn ever for diesel, which feeds into the price of almost everything that moves by truck 14CNN Americans are footing a $100 billion energy bill from the Iran war.

In Britain, unleaded jumped 5p a litre in a single week to 167.17p, the biggest weekly rise since April and the highest level since September 2022, with diesel at 188.63p 3BBC Petrol prices rise by 5p over a week as Iran war sends oil higher. The RAC says there is "no sign of any relief" 3BBC Petrol prices rise by 5p over a week as Iran war sends oil higher.

The deeper problem is refining. Three of the world's four refining hubs (the Middle East, Russia and China) have been sidelined by war and export restrictions, so even where crude is available there is not enough capacity to turn it into fuel 14CNN Americans are footing a $100 billion energy bill from the Iran war. Goldman Sachs warns Brent could top $120 if Gulf output stays well below pre-war levels 14CNN Americans are footing a $100 billion energy bill from the Iran war. Societe Generale thinks it would take $150 to seriously dent demand 2AJE Brent crude surpasses $100 a barrel as Iran, US escalate attacks, which is a polite way of saying prices can climb a lot further before anyone stops buying.