Global benchmarks surged overnight, driven by escalating military confrontations in the West Asia that threaten key energy chokepoints and reignite global inflationary pressures.
Brent crude futures spiked nearly 6% to hit $109.97 a barrel, the highest settlement in four months, as traders rapidly priced in a mounting geopolitical risk premium. The surge follows a volatile week in which exchanges of attacks between the United States and Iran near the Strait of Hormuz pushed crude prices up by more than 30%, according to AFP.
The supply-side anxieties were compounded by fresh developments on the Red Sea, where Yemeni armed forces—advancing toward the Bab al-Mandeb waterway—targeted multiple Saudi energy facilities in retaliation for Riyadh’s blockade. The capture of the strategic port of Mokha by Yemen’s army on Thursday has further heightened concerns over maritime security in the region.
By Friday, Brent crude was testing the $110 threshold, a level unseen since May. Concurrently, the U.S. benchmark, West Texas Intermediate (WTI), climbed past $104 a barrel, mirroring its previous peak in May.
With no diplomatic off-ramp in sight, market analysts warn that the protracted conflict is setting the stage for a secondary wave of global inflation. The sustained rally in energy prices is expected to intensify pressure on central banks, forcing policymakers to maintain or further tighten aggressive monetary stances to combat rising consumer costs.
