Middle East tensions fuel oil rally, raise global economic risks

Rising tensions in the Middle East are driving oil prices higher and raising fears of renewed disruption to global energy supplies, as the expanding conflict threatens some of the world's most critical shipping routes and adds to inflationary pressures across the global economy.

Kamran Khan said on On My Radar that Brent crude has climbed to around $90 per barrel, while U.S. benchmark WTI is trading near $84, as markets increasingly price in the risk of supply disruptions stemming from the escalating conflict between the United States and Iran.

He said the conflict has entered a more dangerous phase, with hostilities spreading to Iraq, Yemen, and the Red Sea, intensifying concerns over the security of the Strait of Hormuz and the Red Sea—two strategic maritime corridors that handle a substantial share of global oil shipments.

The episode also examines Saudi Arabia's proposal for a Red Sea maritime coalition, the U.S. Federal Reserve's decision to keep interest rates unchanged, and the implications of persistently high oil prices for inflation, interest rates, and Pakistan's economy.