Middle East Conflict Drives Oil Prices to Four-Month Highs
Crude oil prices have surged to four-month highs as tensions in the Middle East escalate. Analysts warn that Brent crude could top $120 per barrel by year-end if fighting continues.
RBC Capital Markets' Helima Croft says maritime traffic through the Bab el-Mandeb is 'gravely imperiled' due to Houthi advances. This has led to increased risks of attacks on Saudi energy infrastructure and tankers in the Red Sea.
The Strait of Hormuz, another key oil transit route, has also seen heightened tensions. Brent crude prices have pushed past $100 per barrel, with a recent spike bringing it close to $110.
As oil prices rise, inflation fears are growing. Bond yields have surged in response, prompting investors to prepare for interest rate hikes from central banks.