HONG KONG, Aug 11 — Oil prices extended a strong rally today as hopes for a reopening of the Strait of Hormuz fade, fanning fresh inflation fears and ramping up bets on at least one US interest rate hike this year.
Crude has surged more than 10 per cent over the past week, with the United States and Iran appearing no closer to a deal on the crucial waterway despite upbeat comments from the White House earlier in the month.
In the latest blow, Donald Trump said yesterday he would seek conflict compensation from Iran as part of any peace negotiations, citing attacks and killings stretching back decades allegedly backed or perpetrated by Tehran.
The US president’s announcement was a direct response to Tehran’s demand for US war reparations as a precondition to any resolution of the crisis.
Trump’s remarks came a day after he said he was “low-keying” his approach to the conflict, suggesting he was prepared to let economic pressure mount in place of further military strikes.
However, the latest back-and-forth risks putting a quick agreement further out of reach, and on Monday both main crude contracts jumped around five percent. They rose more than two percent on Tuesday, with Brent edging back towards $90 a barrel.
“In the absence of any positive headlines on negotiations to reopen the strait, pressure on oil prices has been upward,” wrote Jason Wong at BNZ.
And Stephen Innes, global strategist at Quintex Intel, said: “In effect, both sides are trying to weaponise the oil barrel without firing another shot. Washington is trying to choke Iran’s ability to get its crude out, while Tehran is squeezing the artery through which everybody else’s crude gets through.
“It is quite the game of chicken.”
The prospect of oil prices remaining elevated for the time being has revived concerns over inflation and boosted the chances of interest rate increases.
While a surprise loss of more than 20,000 jobs in the US economy last month eased fears of a Federal Reserve hike, a spike in price pressures could force the bank’s hand.
Cleveland Fed boss Beth Hammack told Yahoo Finance on Monday: “I would say in general, one 25-basis-point move probably doesn’t do a whole lot for the economy.
“So it’s probably some number of (movements). But I don’t want to prejudge what that number is going to be.”
The US-Iran deadlock and rising crude costs come as traders await the release of consumer price data on Wednesday, which could play a key role in guiding the Fed on its next move.
Asian equities were mixed following a tepid day on Wall Street.
Hong Kong, Shanghai, Wellington, Mumbai, Bangkok and Jakarta all retreated, but there were gains in Seoul, Sydney, Singapore, Taipei and Manila. — AFP
Date: 11 August, 2026 5:00 pm
Source: Malay Mail
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