Global crude oil prices reach highest in a month as West Asia simmers
New York, July 14
Oil prices are on the rise again as the interim peace agreement between Iran and the US frays, leading to renewed strikes between the two sides and dimming hopes of a durable peace in the region.
The critical Strait of Hormuz is again in the spotlight with US President Donald Trump bringing back the blockade of the strait and threatening to impose a 20 per cent fee on the transit of cargo.
Global benchmark Brent crude oil prices climbed to USD 86, while the US West Texas Intermediate rose to USD 80, their highest levels in a month.
Higher crude oil prices threaten gasoline prices that may have likely cooled last month as global crude oil prices dropped to pre-conflict levels after the signing of a memorandum of understanding between Iran and the US.
With the attack on tankers in the strait by Iran and retaliation by the US, the renewed conflict has cast uncertainty over any durable peace in the region.
US inflation numbers due today may have eased a little due to the fall in gasoline prices in June, but that comfort may not extend as the latest round of strikes could escalate into a wider conflict. Iran has targeted US bases in Kuwait and Bahrain, while in a fresh development, the Houthis, supported by Iran, launched strikes on Saudi Arabia, breaking a four-year truce. The Houthis accused the Saudis of attacking an airport under their control.
US Federal Reserve Governor Christopher Waller, in a speech on Monday, said that the central bank shouldn't "fight the last war" on inflation. He said that he is aware of the situation and the Fed won't repeat past mistakes, referring to the post-Covid phase when the central bank came under criticism for responding late to rising inflation. The delay cost the economy dearly as the inflation became more entrenched.
Higher inflation is also a big worry for President Trump as he faces the mid-term elections in November. Trump had warned the US oil companies to bring down the pump prices of gasoline and had ordered the Justice Department to launch a probe.
— ANI
Reader Comments
Why can't the world learn from conflicts? The Strait of Hormuz is like our lifeline for energy. Every time there's tension there, we Indians feel the pinch at the pump. Need to fast-track our renewable energy goals. 🌞
Trump's tactics are just adding fuel to the fire. Blocking straits and imposing fees won't solve anything. It's the innocent citizens in India and other developing nations who end up paying more for everything from transport to food prices.
This is why India's push for electric vehicles and solar energy is so important. We can't keep being at the mercy of West Asian conflicts. But in the short term, this is going to hurt our inflation numbers badly. 📉
Respectfully, our government should also think about diplomatic solutions. Playing both sides with Iran and the US might give us short-term benefits, but in a crisis like this, we're the ones who get squeezed. Time to be more proactive in peace talks.
The Houthis breaking the truce with Saudi Arabia is a dangerous escalation. For us in India, the Gulf is not just about oil - millions of our workers are there. Any wider conflict puts their lives at risk too. 🙏 Stay safe, everyone.
N Nikhil C