On Wednesday morning, Brent crude futures rose nearly 4% to $94.23, while U.S. West Texas Intermediate crude increased by 3.8% to $87.46, following the U.S. Central Command's eleventh consecutive night of strikes against Iranian military targets.
Secretary of State Marco Rubio emphasized the importance of the Strait of Hormuz, a critical shipping route for oil, and accused Iran of not being serious about negotiations. The ongoing military actions and lack of diplomatic progress have led to heightened fears of stagflation, as energy prices continue to climb.
Deutsche Bank's Jim Reid noted that the market's focus has shifted back to inflation, with a rising probability of a Federal Reserve interest rate hike. Analysts from ING highlighted additional supply risks in energy markets, particularly due to disruptions in the Black Sea, where Russia's CPC terminal has halted oil loadings from Kazakhstan amid ongoing attacks on tankers.
This situation could lead to significant production cuts in Kazakhstan, further straining global oil supplies