A resumption of major combat that targets Iranian energy infrastructure would hit oil from two directions: direct loss of Iranian supply and a renewed threat to Gulf shipping and Hormuz flows, which are already under strain after Wednesday's tanker attack north of Qatar. That argues for a firmer war-risk premium in crude even before any decision, with Brent particularly sensitive to headlines over the next three to four weeks. Higher oil would feed straight into the inflation concerns flagged in this week's Fed minutes, strengthening the case for further US rate hikes and supporting the dollar. Gold and other havens would likely draw support, while Israeli assets and energy-importing Asian economies look most exposed to escalation.-Washington has readied the option of restarting the war on Iran, and the timing question now runs through two election campaigns and the oil price.Summary:The Pentagon instructed US Central Command several days ago to complete preparations for resuming major combat operations in Iran, US officials told AxiosNo launch date was set and President Trump has not made a final decision; US and Israeli sources said strikes could come before the US midterm electionsAny renewed campaign is expected to involve heavy bombing of Iranian energy, infrastructure and nuclear targets, likely with Israeli participationUS-Iran talks have stalled, with Qatari mediators awaiting Iran's reply to a US counterproposal that includes nuclear demandsTrump and Netanyahu spoke on Wednesday, their second call in days; one Israeli official said the chances of action before the elections were not high but rose significantly afterwardsIsraeli officials said Iran's leadership could strike first, fearing a third surprise attackThe Pentagon has instructed US Central Command to complete preparations for a possible resumption of major combat operations in Iran, Axios reported on Wednesday, citing US officials, as President Donald Trump weighs whether and when to restart the war.The directive, issued several days ago, did not specify a date for strikes, and Trump has not made a final decision. However, US and Israeli sources told Axios that action could come before the US midterm elections, and possibly before Israel's elections, which are due a week earlier. The Atlantic reported earlier on Wednesday that Trump was considering strikes on Iran ahead of the midterms.According to the sources, any renewed campaign would be expected to include heavy bombing of Iranian energy facilities, infrastructure and nuclear sites, most likely with US and Israeli forces operating together. A Pentagon official said the department's role was to develop military options for the president, while a White House official said all options remained available. The White House official also asserted that the US held a strong position, citing control of the Strait of Hormuz and pressure on Iran's economy.Diplomacy appears stuck. Negotiations between Washington and Tehran have made no progress, and Qatari mediators are still waiting for Iran to respond to a US counterproposal that included demands for nuclear concessions. Trump's national security team met at Camp David on Friday, and an Israeli official said part of that discussion covered a possible return to major combat. Secretary of State Marco Rubio described the meeting as focused on long-term foreign policy planning.Contacts between the US and Israeli leaders have also intensified. Trump spoke with Israeli Prime Minister Benjamin Netanyahu on Wednesday, their second call in days after weeks of little contact, and a US official said they discussed the anniversary of the 7 October attack. The call followed a meeting between Netanyahu and his security cabinet on Iran.A second Israeli official said discussion of renewed operations had increased, judging the chances of action before the elections to be low but not ruled out, and significantly higher after the US vote. Israeli officials also warned that Iran's leadership could strike first, having already suffered two surprise attacks. Iranian retaliation would likely involve large-scale missile fire at Israel, and Axios noted that heightened tension could reshape the final stretch of Israel's election campaign, with any decision, and its impact on oil markets, likely to dominate the coming weeks. This article was written by Eamonn Sheridan at investinglive.com.