Oil nears US$100 as US‑Iran tensions escalate, stoking global inflation worries

OIL prices surged past $100 per barrel on September 9 amid escalating tensions between the United States and Iran, sparking concerns of global inflation. The ongoing conflict, now in its seventh month, has raised doubts about the Federal Reserve's ability to keep interest rates low to combat surging consumer costs. Iran has blocked the Strait of Hormuz, a crucial shipping route, while Washington targets the Islamic Republic's ports and economy.

Iran also threatened oil tankers off Kuwait and Bahrain, urging crews to abandon their vessels. The conflict has intensified, with Iran-backed Houthis in Yemen and Saudi Arabia striking each other, targeting oil facilities in a bid for control of the Red Sea's Bab al-Mandab chokepoint. Energy cost hikes have driven up inflation worldwide, prompting central banks to consider interest rate hikes.

The US consumer price index release on Friday is crucial in determining whether the Federal Reserve will raise rates next week. Market analysts warn that the Middle East conflict's ongoing supply disruptions could exacerbate inflation concerns, putting pressure on global economies.