Brent Crude Price Drops Amid US Interest Rate Hike and Middle East Tensions

The price of Brent crude has dropped by $3.62/bbl to trade at $104.28/bbl after the US Federal Open Market Committee increased its key interest rate by 0.25 percentage points to a range of 3.75-4%.

This decision marks the first hike since 2023 and comes amid a worsening situation in the Middle East, where Iran's foreign minister Abbas Araghchi has said that the country welcomes a diplomatic resolution but remains prepared to defend its national sovereignty.

The upward pressure on Brent crude's price had been driven by the ongoing conflict, with prices trading above $100/bbl. However, the US Fed's decision has introduced downward pressure due to the stronger US dollar making dollar-denominated commodities like oil more expensive for holders of other currencies.