US-Iran Conflict Drives Oil Prices to 13% Weekly Surge

Oil prices are surging due to heightened tensions between the United States and Iran, which threaten global energy supplies. The Brent crude price has risen towards US$109 a barrel, on track for a weekly gain of about 13 per cent, its biggest since mid-July.

The escalation in fighting has intensified over the past two weeks, with the US targeting Iranian oil tankers while Iran has launched missiles at US warships and tankers in the Persian Gulf. The conflict has raised concerns over a prolonged oil supply shock, potentially adding to inflationary pressures and complicating monetary policy.

The US dollar index rose 0.23 per cent to 99.048 on Thursday as investors increased bets on a Federal Reserve rate increase next week. Markets were pricing in a 70 per cent chance of a 25-basis-point hike, up from 60 per cent the previous day.