Tanker Strikes, Iran Threats Push Oil Past $98, Devere CEO Warns Of Inflation Shock
Oil surging above $98 forces investors to reprice risk across investment portfolios, affirms the CEO of one of the world's largest independent financial advisory organisations.
Nigel Green ofdeVere Group's comments come as Brent crude tore through $98 a barrel, its highest level since early June, after a tanker was hit roughly 70 nautical miles southwest of Al Shuqaiq off Saudi Arabia.
Yemen's Houthis claimed responsibility, saying they had targeted two Saudi vessels with drones and missiles. US West Texas Intermediate climbed in tandem, gaining around 3% to trade near $89, extending a run that has pushed crude sharply higher over the past month alone.
The strike lands hours after President Trump warned Washington would destroy an Iranian bridge or power plant every time Tehran fires on a ship in the Strait of Hormuz. Iran responded through its state news agency, threatening to hit US-linked energy infrastructure across the region in kind.
AdvertisementThe escalation arrives as the Federal Reserve is already holding rates steady near 3.50% to 3.75%, with futures markets scaling back expectations for cuts this year as core inflation readings stay stubbornly above target.
A fresh leg higher in crude threatens to undo months of progress on headline inflation as central bankers were gaining confidence that price pressures were finally cooling.
Central banks had been edging toward the view that inflation was finally beaten. This kind of spike puts that view on ice.
Bond investors had been betting on the Fed cutting through the rest of the year. Oil at these levels makes that bet a lot shakier.
The dollar usually gains when the Gulf turns dangerous, because money runs somewhere safe.
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