Oil Prices Soar as Middle East Violence Escalates
Oil prices surged 2% on Tuesday as ongoing violence in the Middle East added to global uncertainty. The Iran conflict, which has persisted for over a month without significant fighting, has curtailed traffic in the Strait of Hormuz, a critical shipping route that accounts for about 20% of the world's oil shipments.
The price hike comes after the US attacked rocket launchers on an Iranian island on Sunday, saying they were preparing to launch mines into the Strait of Hormuz. In response, Iran launched missiles at US sites in Jordan, but all were intercepted.
US benchmark crude rose 2.5% to $87.84 per barrel, while Brent crude gained 2% to $92.35 per barrel. The surge in energy prices has fueled already stubbornly high inflation, which is above the Federal Reserve's 2% target.