Brent crude pushes past US$100 on Mid-East flare-up, fanning inflation fears

Brent crude oil prices surged past the US$100 mark on September 9 for the first time since mid-July as tensions in the Middle East escalated. The international benchmark Brent oil jumped over 2 percent to US$100.19 a barrel before settling slightly lower at US$99.90. The ongoing conflict between the US and Iran, now in its seventh month and showing no signs of easing, has heightened fears of supply disruptions and inflationary pressures.

With the US-Iran conflict deadlocked, Tehran controls the Strait of Hormuz, a crucial shipping route, while Washington targets Iranian ports and economy. On September 9, Iran accused the US of attacking one of its bases in Jordan after American strikes on its vessels in the Strait of Hormuz, retaliating against ballistic missile launches at a US warship.

The ongoing hostilities have also led to strikes between Saudi Arabia and Iran-backed Houthis in Yemen, with rebels threatening oil facilities near the Red Sea's Bab al-Mandab. Oil prices have been surging, with Brent hitting US$99.68, just shy of the July high of US$100. This surge in energy costs has fueled global inflation, prompting central banks to consider interest rate hikes.

The European Central Bank is expected to raise rates on September 10. Analysts warn that persistent Middle East tensions could reverse recent progress on inflation, as higher oil prices strain consumers and businesses.