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Emma Ma

An overnight escalation in hostilities between the United States and Iran pushed global oil benchmark Brent futures above US$97 a barrel at one point on Wednesday, marking their highest intraday level since early June – though analysts said prices are unlikely to match the peak seen earlier this year.
The latest surge followed fresh US air strikes on Iranian targets on Tuesday, prompting retaliatory strikes by Tehran. Iran launched missiles and drones at sites across the region and targeted US-linked assets in Jordan, according to an Associated Press report on Wednesday.
CNN also reported on Tuesday that Iranian state broadcaster IRIB had cited multiple explosions in the Strait of Hormuz, one of the world’s most important energy-shipping chokepoints.
After the US Central Command announced the attacks on social media on Tuesday, Brent crude climbed more than 5 per cent to about US$95 a barrel, and continued to trade in volatile fashion around that level during Wednesday’s Asian session.
“Traders are bracing for further supply disruptions. In the near term, we see no practical path towards a resolution between the US and Iran, so hostilities are set to persist. That will keep global crude prices well-supported,” said Yan Lili, an analyst at Zhejiang-based Xinhu Futures.
Beyond the geopolitical risk premium, Zhao Xuyi, an analyst at Shanghai-based Guotai Junan Futures, said shipping represented “an even more critical factor underpinning oil prices”.
Reuters reported on Tuesday that two supertankers loaded with Saudi crude were struck by unknown projectiles in near-simultaneous incidents as they sailed out of the Strait of Hormuz late Monday. Both tankers were carrying 2 million barrels of Saudi crude.
“The strikes will lend additional support to high crude prices by eroding shipowners’ willingness to send vessels through this corridor. Should the Red Sea crisis drag on, Middle East crude exports could retreat to subdued levels,” Zhao said.


US President Donald Trump warned that Iran would face renewed US strikes at “a much harder and higher level” if it retaliated, shortly after American forces announced the attacks.
Despite the risks, analysts said they did not expect crude prices to revisit March’s intraday peak of over US$119 a barrel, citing mounting domestic political pressures on Trump.
Meanwhile, the yield on the 10-year Treasury note – which measures the annual compensation investors demand for lending to the US government over a decade-long horizon – climbed to over 4.8 per cent on Wednesday, hitting its highest level since January 2025. That suggests ordinary consumers in the US could face higher borrowing costs in the coming weeks and months.
“High oil prices are expected to once again stoke US inflation. With the US midterm elections looming, I do not expect these growing hostilities to persist for a prolonged period. Investors should be cautious about the Taco trade,” said Zhao of Guotai Junan Futures.
Taco is a Wall Street acronym that stands for “Trump always chickens out”, referring to the view that the US president tends to back away from aggressive threats when the market comes under pressure.
The intensifying US-Iran conflict has also raised market expectations for a possible quarter-percentage-point increase in the federal funds rate target range at the Federal Open Market Committee meeting scheduled for September 16.
The Federal Reserve kept its target range at 3.50 per cent to 3.75 per cent at its July gathering.
According to the CME FedWatch Tool – which derives odds from federal-funds futures pricing – the implied probability of such an increase stood at 70.2 per cent as of Wednesday afternoon, up from 65.43 per cent on Monday.
Data from the US Bureau of Economic Analysis showed that the Personal Consumption Expenditures Price Index – the Fed’s preferred inflation gauge – rose 3.7 per cent year on year in July. The headline gauge has now run above the central bank’s 2 per cent inflation target for 65 consecutive months.


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Fresh military strikes in the Middle East have sent energy prices surging, leaving traders to grapple with renewed volatility


Fresh military strikes in the Middle East have sent energy prices surging, leaving traders to grapple with renewed volatility.


As oil tops US$97, US-Iran war escalation has markets bracing for supply risks

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Fresh military strikes in the Middle East have sent energy prices surging, leaving traders to grapple with renewed volatility

Fresh military strikes in the Middle East have sent energy prices surging, leaving traders to grapple with renewed volatility