US-Iran Conflict Spikes Oil Prices Over $90 per Barrel

A military conflict between the United States and Iran has intensified following the collapse of a peace deal backed by President Donald Trump. The U.S. conducted nine consecutive nights of airstrikes targeting Iranian assets, including cities such as Tabriz and Chabahar, after an Iranian assault on a U.S. military base in Jordan killed at least two American troops. In retaliation, Iran launched missiles toward Jordan and struck targets in Kuwait and Bahrain, including critical infrastructure at the Kuwait Petroleum Corporation.

Both nations have targeted shipping in the Strait of Hormuz, with the U.S. enforcing a naval blockade on Iranian ports and Iran targeting vessels it claims violate navigation rules. This volatility has caused a sharp decline in vessel traffic and a reported vessel fire northwest of Oman's Kumzar. Consequently, Brent crude prices surged above $91 per barrel on July 20, the highest since mid-June. In the U.S., gasoline prices climbed toward $4 per gallon, creating political pressure ahead of midterm elections.

The economic fallout has triggered global market instability. Investors in Asia reacted with hesitation, and South Korea's Kospi index fell nearly 5% as energy-driven inflation fears coincided with a sell-off in AI stocks following the release of the Kimi K3 model by Chinese startup Moonshot AI. Financial analysts suggest the energy crisis may force the Federal Reserve to hike interest rates as early as September 2026 to combat inflation.