Oil Prices Surge Over 7% Amid U.S.-Iran Tensions Ahead of Fed Decision
Oil prices jumped more than 7% on Wednesday as renewed geopolitical tensions between the United States and Iran, along with threats to shipping through the Bab el-Mandeb Strait, pushed WTI above $84 and Brent crude toward $90. The surge came hours before a key Federal Reserve interest-rate decision amid uncertainty over whether policymakers will raise rates for the first time since 2023. President Donald Trump hinted at potential military action against Iran following an attack on a U.S. base in Jordan, while Houthi rebels backed by Iran warned of imposing fees on commercial shipping through the strategic waterway. The situation has raised concerns about oil supply disruptions and inflation risks just as June's cooling headline inflation appears to be reversing. The Federal Reserve abandoned its long-standing forward guidance earlier this year, leaving investors in a state of uncertainty ahead of Wednesday’s decision.