Global Oil Prices Surge Amid Escalating Middle East Conflict 📈

Oil markets saw a third consecutive day of gains as a widening U.S.-Israeli conflict with Iran puts energy infrastructure and global supply chains at significant risk. • Price Movements: Brent crude futures rose 1.4% to US$ 78.83/bbl, following a volatile Monday where prices peaked at US$ 82.37 (highest since Jan 2025). WTI crude increased 1% to US$ 71.97/bbl. • Supply Bottlenecks: The Strait of Hormuz, a conduit for 20% of global oil demand and LNG, is effectively closed. Iran has threatened to fire on vessels, and insurers have cancelled coverage for the waterway. • Infrastructure Damage: Strikes have targeted Gulf energy facilities; notably, Saudi Arabia shuttered its largest domestic refinery following a drone attack. • Refined Products: U.S. diesel futures hit a two-year high (US$ 2.99), while European gasoil jumped 2.7% after an 18% surge on Monday. • Economic Outlook: Analysts have revised 2026 Brent assumptions to US$ 80/bbl, with "extreme case" projections reaching US$ 120–US$ 150/bbl. _Context for Sri Lanka_: Continued volatility in global oil and refined product prices typically exerts upward pressure on domestic fuel costs and electricity generation expenses, impacting the broader transportation and manufacturing sectors.