SYDNEY: Escalating conflict across the Gulf region has pushed global oil prices sharply higher, with crude gaining almost 40% this month and raising fresh concerns about inflation, tighter monetary policy and slower economic growth.
Brent crude was trading around $100.30 per barrel on Friday after briefly climbing to $102, its highest level in two months, following a 7% surge in the previous session. Although prices eased slightly during trading, persistent geopolitical tensions continued to keep markets on edge.
The latest rally has been driven by attacks on Saudi oil tankers in the Red Sea by Yemen’s Houthi movement, adding to fears over disruptions in global energy supplies. The threat comes as shipping through the Strait of Hormuz—a vital route for international oil exports—remains under pressure due to heightened tensions involving Iran.
Financial markets also reacted negatively to the deteriorating security situation. Asian stock markets declined, while investors reassessed the likelihood of further interest rate increases as higher energy costs threaten to fuel inflation. In the United States, Nasdaq futures slipped despite stronger-than-expected earnings from Intel, as concerns over rising oil prices and heavy spending linked to artificial intelligence weighed on sentiment.
Meanwhile, US President Donald Trump warned Iran and its Houthi allies of “major military punishment” after American forces carried out another round of strikes on Iranian targets, extending a series of military operations that have continued for nearly two weeks.
Nigel Green, Chief Executive Officer of financial advisory firm deVere Group, said markets are only beginning to assess the consequences of simultaneous threats to two of the world’s most important oil shipping routes, warning that prolonged disruptions could have far-reaching implications for the global economy.
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