‘Crude Oil Price Jump Due To Middle East Conflict Increases Inflation Risks’ – Xavier Radio Ug

The ongoing conflict in the Middle East continues to stoke uncertainty in global financial markets, as investors weigh the risk of supply disruptions.
The price of Brent Crude Oil jumped close to 84 dollars per barrel, marking its highest-level since July 2024.
The US and Israel’s collaborative attack on Iran, which resulted in retaliatory action by Iran has entered a fifth day.
The conflict has raised concerns about an extended blockade of shipments through the Strait of Hormuz, which is a critical route for global oil supply.
CEO at Shiloh Capital, Thami Netha says the surge in crude oil prices is compounding inflation risks, at a time when major central banks were considering reducing interest rates.
“So, the immediate global reaction will always be around managing global supply. So, I think about 33% of global supply comes from that region of oil. There’ll be threats to routes. The Strait of Hormuz especially will drive up prices. This typically will drive capital to safe havens. So, that’s how you see the dollar strengthening gold US treasuries. So, it’s typically what you’d call a risk of trade. Then there will be equity swings, which come again with a view of risk before economic data. So, you’ll see emerging markets selling off, defence and energy stocks will rally. And we on our side of the world, we focus largely on commodities, we’ll definitely have some volatility there. So, it’s an emerging market view that there’s excessive risk or extra risk above what is acceptable there’ll be a sell-off, which is what we saw now. So, oil is the transmission mechanism for geopolitics into inflation.”

 
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