Economist Vivek Dhar warns Donald Trump’s conflict with Iran could push oil prices higher, risking rate increases.
Economists warn that ongoing conflict involving Donald Trump and Iran could lead to further interest rate hikes in Australia. Vivek Dhar, an energy commodities strategist at Australia’s Commonwealth Bank, stated that rising oil and fuel costs could cement a fourth rate increase this year if the situation is not resolved within a week. The speculation follows reports of US missile strikes on Iran and Donald Trump’s announcement of a new maritime blockade, which has already pushed oil prices to their highest point this month. Brent crude oil hit $85 a barrel on Tuesday morning, while the West Texas Intermediate benchmark price for US crude exceeded $80 a barrel, both up from near $70 in early July. Dhar warned that escalating hostilities could rapidly deplete global oil stockpiles. He calculated that continued conflict could push Brent oil prices to $100 a barrel within ten days and potentially reach $150 a barrel within ten weeks. The warnings suggest that the current geopolitical tension presents a significant risk to global energy markets and associated economic stability.