US-Iran Conflict Sends Oil Prices Soaring Amid Rate Hike Speculation

Oil prices surged more than two percent on Monday following a fresh escalation in the US-Iran conflict, while stock markets were mixed after Federal Reserve official Kevin Warsh hinted at an interest rate hike.

The price of North Sea Brent crude, the global benchmark, rose 3.56% to break through the $90 mark during Asian trading hours and early European sessions. West Texas Intermediate (WTI), the US benchmark, reached $86.33 per barrel after a 3.51% increase.

The spike in oil prices comes as tensions between the US and Iran have been rising again, with the latest developments threatening to disrupt global energy supplies. The Strait of Hormuz, through which nearly a fifth of global crude and gas passes, remains largely closed due to ongoing hostilities.

Federal Reserve official Kevin Warsh has signaled his readiness to increase borrowing costs in response to stubbornly high inflation, currently at 3.7 percent, which is nearly double the Fed's two-percent target. Warsh described the spike in inflation as 'concerning' and stated that he would be 'hard-pressed' to describe current financial conditions as 'restrictive', hinting at potential rate hikes.