🛢️ Global Oil Prices Surge Amid US-Iran Escalation: Impact on Fuel Costs

Oil prices extended gains on Wednesday due to escalating Middle East tensions following fresh overnight strikes between the US and Iran, raising supply disruption concerns along critical maritime routes like the Strait of Hormuz. • Global Benchmark Prices: Brent crude rose 0.8% (+75 cents) to US$ 95.40 per barrel, while US WTI crude gained 0.5% (+44 cents) to US$ 90.66 per barrel, following a US$ 4+ surge in the previous session. • Supply Route Disruptions: Increased threats around the Strait of Hormuz—a transit point for nearly 20% of global oil consumption—have heightened risk premiums and elevated international shipping hazards. • US Inventory Levels: US crude inventories dropped by 2.6 million barrels for the week ended August 28, with distillate stocks falling by 265,000 barrels, further tightening global supply. • Macro Economic Impact: Rising global crude prices present inflationary pressures for net oil-importing economies like Sri Lanka, impacting national import bills, energy costs, and production expenses across core sectors like manufacturing, transportation, and domestic fuel pricing.