US-Iran Tensions Send Brent Crude Prices Soaring Amid Interest Rate Hike Expectations

The US-Iran tensions have escalated once again, with both countries engaging in military actions over the weekend. The Brent crude futures contract (BRNX6) saw a 2.76% increase to $90.47 per barrel as a result of these developments.

According to Reuters reports, the US struck Iran's Larak Island, prompting Tehran to launch missiles at two US air bases in Jordan. In response, US President stated that Washington would 'hit Iran very hard', while Iranian officials claimed they have sufficient military resources to respond forcefully.

The increased tensions come as the US-Iran conflict reaches its sixth month, raising concerns over energy supply disruptions and rising inflationary pressures worldwide.

Market participants are closely tracking oil prices to infer potential monetary policy moves by the Federal Reserve. As a result, the market-implied probability of an interest rate hike at the Federal Reserve's September meeting rose to 65.4%, compared to a 34.6% likelihood of rates remaining unchanged.