📈 Global Oil Prices Surge Amid Middle East Hostilities

• Market Impact: Global oil benchmarks rose to a one-week high on Wednesday. Brent futures increased by 81 cents (0.8%) to US$ 96.81 a barrel, while U.S. WTI crude climbed 91 cents (1.0%) to US$ 94.67. • Geopolitical Risks: Tensions flared as Iran launched ballistic missiles at Kuwait and Bahrain. While the targets were missed, U.S. forces responded with strikes on Iran's Qeshm Island. Additionally, Iran has mined large portions of the vital Strait of Hormuz, keeping vessel transits significantly below pre-conflict levels. • Supply Constraints: Stalled U.S.-Iran diplomatic talks and IEA warnings of critical global stock shortages ahead of peak summer demand are driving up risk premiums. Furthermore, provisional API data indicates U.S. crude oil inventories fell by 6.8 million barrels for the week ended May 29, marking a seventh consecutive weekly decline. • Sri Lankan Context: As an import-dependent nation, rising global energy prices put direct upward pressure on Sri Lanka's import bill and domestic inflation, underscoring the ongoing need for energy diversification.