Oil prices jumped by more than 6% amid escalating tensions in the Middle East

World oil prices rose sharply amid hostilities involving Iran and the Houthis’ advance in Yemen toward the strategically important Bab el-Mandeb Strait. WTI surpassed $102 per barrel, while Brent reached $107, Yle reports, citing Reuters and AP, writes UNN.

Details

Oil prices rose by more than 6% in a single day. Markets reacted, in particular, to reciprocal attacks by the United States and Iran on ships in the Persian Gulf, as well as statements by U.S. President Donald Trump that gave investors no reason to expect a swift end to the confrontation.

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An additional factor was the advance of Iran-backed Houthi forces in southwestern Yemen. This brings the group closer to the Bab el-Mandeb Strait, through which more than 10% of global cargo traffic passes.

Inflationary pressure is rising in the United States

The rise in oil prices is intensifying concerns about further acceleration in inflation. The U.S. Producer Price Index rose by 5.4%, while analysts had expected 5.2%.

Against this backdrop, investors are increasingly allowing for the possibility that the Federal Reserve may raise interest rates instead of cutting them, as Trump is seeking.

At the same time, the yield on 30-year U.S. government bonds exceeded 5.3% — the highest level since 2001.

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