Global Oil Prices Soar to $105 per Barrel Amid Escalating Middle East Tensions
Oil prices have surged to their highest level since May as tensions in the Middle East continue to escalate. Brent crude, the global oil benchmark, hit $105 per barrel for the first time in five months. The rise in oil prices has added to concerns about inflation and central bank rate hikes, sending ripples through bond and stock markets.
Traders are bracing for a more prolonged supply shock caused by the Iran war, which has intensified fighting in the Straight of Hormuz and Red Sea. The US and Iran have traded strikes, while the Iran-backed Houthis have attacked Saudi Arabia and ignited tensions in the Bab al-Mandab Strait.
Jason Tuvey, deputy chief emerging markets economist at Capital Economics, said that the step up in attacks suggests Iran and its proxies are trying to regain the initiative in the war. This could set back the recovery in oil output in the Gulf and raise the risk of further price increases.