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Oil prices rose more than 7% this week as the United States and Iran resumed military exchanges and U.S. diesel prices hit a record high.

Oil prices gained more than 7% for the week as the United States and Iran resumed military exchanges in the seventh month of their conflict. Brent crude futures closed at $96.28 a barrel, while West Texas Intermediate crude futures settled at $91.48.

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These price increases, combined with a steeper rise in fuel prices, have pushed inflation and government borrowing costs higher globally. Average U.S. diesel prices hit a record high due to renewed hostilities between the United States and Iran, alongside Ukrainian attacks on Russian refineries. While the U.S. government stated that Middle Eastern oil flows have returned to near normal levels, shipping data shows that flows remain seriously disrupted. Iraq increased its August oil exports to approximately 2.34 million barrels per day from 1.35 million barrels per day in July. Analysts from Citi and ANZ raised their Brent crude price forecasts for the third quarter and the short term, respectively, citing the ongoing Middle East conflict and the slower than expected reopening of the Strait of Hormuz.

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