- Oil prices extended gains Tuesday amid fears of fresh military exchanges between the United States and Iran following a weekend flare-up and Donald Trump's warning that he will hit the country "hard".
- Trump said, according to a Fox News reporter, "We're going to hit them hard. There will be a response."
- Both main crude contracts rose Tuesday, extending the previous day's jump of more than two percent.
- The latest strikes have stoked worries about inflation, pressuring central banks to hike interest rates, which has jolted equity markets.
- US Treasury Secretary Scott Bessent said pressure will continue and a turning point could come "within weeks or months".
Oil prices extended gains on Tuesday, driven by fears of renewed military conflict between the U.S. and Iran. President Trump's warning that he would hit Iran "hard" following recent strikes has heightened concerns over inflation and its impact on global markets.14
The latest military exchanges began with U.S. strikes on the Iranian island of Larak, aimed at preventing Tehran from planting mines in the strategic Strait of Hormuz. In retaliation, Iran targeted U.S. military installations in Jordan and the UAE. Trump stated, "We're going to hit them hard. There will be a response."2
As tensions rise, U.S. Treasury Secretary Scott Bessent emphasized the need for continued pressure on Iran, suggesting that significant developments could occur "within weeks or months". This ongoing conflict has implications for inflation, prompting central banks to consider interest rate hikes, which have already affected equity markets.56
Both main crude contracts saw an increase on Tuesday, building on a previous jump of over two percent, reflecting the market's reaction to geopolitical uncertainties. The situation remains fluid, with the potential for further escalation as both nations navigate this complex standoff.
“The latest strikes have stoked inflation worries, pressuring central banks to hike interest rates and jolting equity markets. Both main crude contracts rose Tuesday, extending the previous day's jump of more than two percent.”
