Oil Rises, Energy Inflation Shadows Fed-ECB-BoJ Meeting
Oil prices rose sharply in European trading on Tuesday (March 17), with Brent remaining above US$100 per barrel as concerns about supply disruptions from the US-Israel war against Iran persisted. This increase came after crude oil prices fell by around 5% in the previous session when reports emerged that some ships had successfully passed through the Strait of Hormuz.
The Brent contract rose 2.8% to US$103.01 per barrel, while WTI rose 2.6% to US$95.54. The price recovery reflects a market that believes the limited passage is not enough to change the overall picture, given that shipping lanes in Hormuz remain largely blocked and US requests for allies to help "police" the strait have reportedly not received a broad response.
The conflict also shows no signs of abating as it enters its third week. Iran has threatened to attack US-affiliated industries in the Middle East following last week's attack on Kharg Island, a major Iranian export terminal. Iran and Israel reportedly exchanged airstrikes early Tuesday, while drones and rockets were also reportedly fired at a US embassy in Baghdad.
The Strait of Hormuz has once again become a focal point, as it typically carries about 20% of the world's oil supply. Iran was said to have effectively blocked the strait earlier this month, but reports on Monday indicated that several Indian- and Pakistan-flagged gas tankers had successfully passed through. Iran had previously signaled that ships from certain countries could pass, while vessels linked to the US and its allies remained at risk of being targeted.
The rise in oil prices since the outbreak of the war has heightened concerns about energy-based inflation, particularly for Asian economies heavily reliant on imports through Hormuz. Markets now believe these inflationary pressures could potentially push global central banks to adopt a more hawkish stance, with policy meetings of the Fed, ECB, and Bank of Japan scheduled for this week.
Source: Newsmaker.id
