Oil Prices Soar as Persian Gulf Tensions Escalate

Global markets are bracing for a tough September as various factors converge to put pressure on them. One of these is the escalating tensions in the Persian Gulf, which have led to rising oil prices. U.S. forces struck two missile launchers on Iran's Larak Island in the Strait of Hormuz, and Tehran retaliated by attacking U.S. forces in Jordan.

U.S. President Donald Trump claimed that Khark Island, Iran's main oil terminal, had been destroyed, but this was not confirmed by the military. However, it is likely that Iran attempted to lay sea mines in the Strait of Hormuz using missiles, which poses a new challenge for the U.S.

Brent crude prices rose 2.4% and exceeded $90 a barrel again as a result of the tensions. This added pressure on stock markets, with Asian indexes mostly declining and European and U.S. equities futures falling between 0.4% and 0.5%. Japan's government bond yields also rose after Friday's sell-off in U.S. Treasuries.

Central banks are preparing for key decisions in September, including the Bank of Japan, which is expected to raise rates at its meeting on September 18. The Reserve Bank of New Zealand may also raise rates for the second consecutive meeting this week, while the Bank of Canada and European Central Bank could take different approaches.