Middle East Conflict Drives Oil Prices Higher Amid Pipeline Shutdown

Fighting in the Middle East has escalated, causing disruptions to global oil supplies and pushing prices above $100 a barrel. The East-West pipeline in Saudi Arabia, which carries around 7 million barrels of crude per day, was temporarily shut down after drone attacks on Thursday.

The attacks caused injuries and emergency teams were dispatched to assess the damage. Analysts predict that this week's developments could push oil prices toward $120 a barrel by year-end, according to Capital Economics.

JP Morgan forecasts eight to nine developed economies will hike interest rates by year-end, citing higher energy costs adding to inflation pressures in the US, Japan, and Australia.

The European Central Bank (ECB) raised three key interest rates by 25 basis points on Thursday, citing persistent inflation pressures generated by the conflict in the Middle East. ECB President Christine Lagarde warned that renewed disruption of energy supplies could cause energy prices to rise further and for longer than expected.