- Brent crude oil prices have risen above $100 per barrel, hitting $105.26 by 1215 GMT on Thursday, following increased tensions in the region.
- US oil has also topped $100 a barrel for the first time since May, with West Texas Intermediate crude rising $3.99 to $100.04.
- Brent crude surpassed $107 per barrel for the first time since May, driven by escalating geopolitical tensions.
- The S&P 500 fell 0.6 percent and is on track for a fourth straight loss, reflecting market reactions to rising oil prices.
- Traders are now betting on a 70 percent chance that the Federal Reserve will raise the federal funds rate at its upcoming meeting, an increase from 61 percent the previous day.
- Iran's Islamic Revolutionary Guard Corps claimed responsibility for attacking 10 ships near the Strait of Hormuz, escalating tensions after the US targeted five Iranian oil tankers.
- President Donald Trump stated he is not seeking a deal with Iran, which has contributed to the rising oil prices.
Brent crude oil prices have soared above $100 per barrel, reaching $105–$107, following a series of attacks by Iran on shipping in the Strait of Hormuz. This escalation has raised concerns about potential supply disruptions, pushing U.S. oil prices above $100 for the first time since May.12
The Iranian Islamic Revolutionary Guard Corps claimed responsibility for attacking 10 ships, escalating tensions in the region after the U.S. targeted five Iranian oil tankers. Analysts note that the durability of the oil price rally will depend significantly on demand from China, the world's largest crude importer, which has recently increased its purchases.8
The surge in oil prices has exacerbated inflation concerns, with the national average gas price rising to nearly $4.28 per gallon in the U.S., impacting consumer goods and transportation costs. The S&P 500 index fell by 0.6 percent, reflecting the broader economic impact of rising energy prices.5
As a result of these developments, traders are now betting on a 70 percent chance that the Federal Reserve will raise interest rates at its upcoming meeting, up from 61 percent the previous day. The 10-year Treasury yield reached 4.93%, its highest since 2023, driven by fears of an inflation crisis linked to soaring energy costs.67
“The move reflects a market still pricing in persistent geopolitical risk, with Persian Gulf tensions showing no credible path to de-escalation,” analysts at ING stated.
“Iran said it attacked 10 ships near the Strait of Hormuz after the US hit five Iranian oil tankers, while the Islamic Revolutionary Guard Corps vowed to escalate. Traders now see a 75% chance of a Fed rate hike next week, up from 61%, as the S&P 500 fell 0.6% and the 10-year Treasury yield touched 4.93%.”
