Oil price surge rekindles inflation fears, global growth forecast cut to 3%

Global economic growth forecasts have been lowered again to 3%, driven by renewed inflation fears as international oil prices surge. The conflict escalation involving the US and Iran has significantly weakened confidence in a lasting peace.

Brent crude futures climbed 5.2% to settle at $78.02 a barrel on the ICE Futures Exchange, marking their highest point since June 19. West Texas Intermediate (WTI) crude futures on the New York Mercantile Exchange also saw a substantial increase, rising 4.4% to $73.52 a barrel, reaching their highest level since June 22.

The spike in oil prices has reignited inflation concerns among investors. This led to a sell-off of US Treasury bonds, pushing the yield on the 10-year note to 4.567%, its highest point since May 22. Jorge Leon, head of geopolitical analysis at Rystad Energy, noted that recent events have "considerably weakened the conviction that the current 60-day ceasefire could evolve into a permanent peace agreement."

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The events of the past few days have considerably weakened the conviction that the current 60-day ceasefire could evolve into a permanent peace agreement.