Oil boosts pressure by rising to May highs

The inflationary pressures are mounting due to a new bullish trend in oil prices. Geopolitical developments have failed to calm the market, with Brent crude prices reaching unprecedented levels since May. The upcoming mid-term elections in the United States, scheduled for November 3rd, have fueled hopes among analysts for diplomatic progress that could lead to lower energy prices for voters.

U.S. President Donald Trump has announced several initiatives aimed at reducing oil prices, ranging from easing sanctions on oil-producing nations to high-level meetings. However, oil prices have climbed once again, surpassing $110 per barrel, marking a five-month high since May. The rally has intensified since early July, when Brent crude prices dipped to the edge of $70 per barrel following an agreement to reopen the Strait of Hormuz.

Recent events have reignited concerns of another price surge. Renta4 analysts warn that the oil market remains tense in the Middle East, where Iran claims it has no choice but to control the Strait of Hormuz. Tensions between the U.S. and Russia, as well as between President Volodymyr Zelensky of Ukraine and Western allies, continue to be evident.

In the past 24 hours, developments in the Middle East have increased market volatility. Kpler, a maritime tracking firm, reports that at least 18 ships have been attacked in the past two weeks, with violence also targeting energy infrastructure in Saudi Arabia, including Aramco's Yanbu facility and the Shaybah oilfield. Airports and military bases in Saudi Arabia have also been hit.

Despite these threats, oil prices have continued to soar, with traders increasing the geopolitical risk premium applied to Brent crude prices, exacerbating inflation concerns.