Oil Prices Climb on Middle East Tensions, Adding Pressure on Global Inflation
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Oil prices surged on Friday amid rising geopolitical tensions in the Middle East, pushing fuel costs higher and renewing concerns about inflationary pressures in global markets.
Brent crude jumped 3.4% to $92.40 per barrel, while West Texas Intermediate (WTI) increased 3.7% to $89.75. The gains mark the largest daily increase since early June, fueled by reports of escalated clashes near the Strait of Hormuz, a critical chokepoint for global oil shipments.
Market watchers cited fears that any prolonged disruption in the region could significantly tighten supply, exacerbating already high energy costs worldwide.
“Supply risk premiums have surged due to instability in the Gulf region,” said Sofia Patel, senior energy analyst at Meridian Capital. “This will likely keep oil prices elevated, which could complicate central banks’ efforts to control inflation.”
Energy stocks responded positively to the rally, with ExxonMobil and Chevron shares rising 2.5% and 2.8%, respectively. However, airlines and transportation companies experienced losses, as higher fuel expenses threaten to dent profit margins.
The price spike is also expected to affect emerging markets that rely heavily on oil imports, many of which are still grappling with debt and currency pressures. Countries in South Asia and Africa could see inflationary ripple effects that hinder economic recovery.
Central banks face a delicate balancing act as energy-driven inflation pressures complicate monetary policy decisions. The Federal Reserve and European Central Bank have already faced criticism for being slow to react to rising commodity prices earlier this year.
In currency markets, the U.S. dollar strengthened on safe-haven demand, rising against the euro and yen. This further complicated the outlook for countries with dollar-denominated debt.
Meanwhile, OPEC+ has signaled a willingness to adjust production if markets become excessively volatile, though no immediate changes have been announced.
Investors will closely monitor developments in the Middle East as well as weekly inventory data for signs of supply stabilization.
