Oil prices have surged past $90 a barrel. Brent crude rose over 3% on Monday, reaching levels not seen since June, due to increasing tensions between the US and Iran which are disrupting shipping in the crucial Strait of Hormuz.
As a researcher following this situation closely, I’ve observed that the United States continued its strikes against Iran throughout the past week – marking eight consecutive nights of action. Currently, US forces are blocking Iranian ports, and officials in Tehran have stated they are now closing off the crucial strait to any vessels not authorized by them.
Why the Oil Price Is Climbing So Fast
Brent crude oil was trading around $91.40 on Monday morning, a 3.2% increase, according to Trading Economics. This follows a significant 14% rise last week. Overall, crude oil prices have recovered almost 30% since falling to around $71 in early July.
The recent increase in activity stems from a specific event: a ceasefire agreement between the United States and Iran on June 17th. This allowed shipping to resume through the strait, causing oil prices to fall from over $107 in May to $71.
US President Donald Trump ended that truce on July 8. The war premium came right back.
Approximately 20% of the world’s oil travels through the strait, but shipping has significantly decreased recently. According to Al Jazeera, Kuwait has reported that Iran attacked a facility providing power and water twice in the past two days.
Americans are also feeling the financial effects. A recent report from BeInCrypto demonstrated that the disruption in oil supplies from the Hormuz Strait is reversing the progress made in lowering inflation last June.
Why the Fed May Hike Instead of Cut
Bonds fell as oil jumped. The 10-year Treasury yield sits near 4.55%, close to a two-month high.
Prices in the US decreased by 0.4% in June, marking the largest monthly decline since April 2020. This drop was primarily due to a 5.7% decrease in energy costs, according to the Bureau of Labor Statistics. However, with oil prices currently around $90 a barrel, this trend may not continue.
As a crypto investor, I’m keeping a close eye on the Federal Reserve. It seems like they’re starting to signal they might raise interest rates soon. The new Chair, Kevin Warsh, didn’t make any changes in June, but a significant number of his team – nine out of eighteen – are predicting rates will go up before the year is out. He didn’t say much about it at a recent event in Portugal, keeping his comments pretty brief.
“Prices are too high,” Kevin Warsh stated.
Traders are reacting to recent economic data. The likelihood of the Federal Reserve raising interest rates at its July 28-29 meeting has more than doubled, jumping from 18% in early July to 36%. Currently, the probability stands at 14% according to CME FedWatch data, which is still considered relatively high.
Silver prices have fallen as concerns about rising oil prices have decreased expectations for interest rate increases by the Federal Reserve. Experts also anticipate that the European Central Bank will raise rates in September.
What This Means for Bitcoin
These economic conditions aren’t benefiting cryptocurrency. High interest rates typically make risky investments less attractive, and Bitcoin is currently finding it difficult to maintain its recent gains, as selling pressure increases every time the price tries to rise, according to BeInCrypto’s analysis.
The recent conflict hasn’t been beneficial for Bitcoin, either. An analysis by BeInCrypto covering the period from February 28th to June 17th showed that traditional stocks actually performed better than Bitcoin as a way to protect investments during wartime.
Everyone is now focused on July 28th and 29th. If the price of oil stays above $90 a barrel, the Federal Reserve increasing interest rates will become much more likely.
2026-07-20 02:32