Oil prices have surged past $102 a barrel as the US-Iran war escalates. Here is why markets are so nervous.

The Atlantic reported that the White House has asked the Pentagon for strike options that could be used before the midterms. Axios says US Central Command is ready to resume major combat operations.

The Strait of Hormuz has been blockaded for about seven months. Roughly a fifth of the world’s oil normally flows through it, so any disruption hits global supply hard.

Iran offered a proposal to unfreeze its assets, lift sanctions and end the blockade, but Washington rejected it, according to the Wall Street Journal.

A Gulf storm shut in 510,000 barrels a day of production, and a tanker was attacked off Qatar. With the Fed having hiked rates last month and the 10-year yield above 5.3 percent, markets face pressure on every side.

For India, expensive oil means a bigger import bill and pressure on the rupee. The RBI’s rate hike was partly aimed at defending the currency.

Analysts warn prices could spike further if strikes hit Iranian oil facilities directly. For now, traders are pricing in risk rather than actual supply loss.