Global Oil Surge: Brent Hits Record Highs Amid Middle East Escalation 📈

The global energy market is facing a significant supply shock as conflict in the Middle East expands, directly impacting Sri Lanka’s energy costs and import bill. • Price Movements: Brent crude jumped 2.16% to US$ 115/barrel, marking a record 59% monthly increase. WTI rose 1.87% to US$ 101.50/barrel. • Conflict Expansion: Iranian-aligned Houthi attacks on Israel and strikes on Iranian infrastructure have widened the conflict beyond the Strait of Hormuz into the Red Sea and Bab el-Mandeb chokepoints. • Supply Chain Risk: With the Strait of Hormuz (handling 20% of global oil) effectively closed, over 4.6 million barrels per day of Saudi exports have been diverted. Disruptions to Red Sea terminals like Oman’s Salalah further threaten refined product flows. • Economic Outlook: Despite reports of "indirect talks" between the U.S. and Iran, markets are bracing for a sharp military escalation. _Impact Note:_ For Sri Lanka, this surge in global prices exerts immense pressure on foreign exchange reserves and may necessitate adjustments in domestic fuel and electricity pricing to manage the rising cost of refined petroleum imports. _Data based on provisional market reports._ ---