Brent crude oil prices increased by about 2% to around $95 a barrel after the US and Iran exchanged new military strikes. This escalation follows the collapse of a two-month ceasefire agreed between the two countries in April. The Strait of Hormuz, a critical global shipping route, was also reportedly closed temporarily during the conflict.
The current hostilities began after US Central Command (Centcom) carried out "self-defence strikes" in southern Iran. These strikes targeted military, surveillance, and radar sites. Iran responded with its own attacks on US military assets in Bahrain, Kuwait, and Jordan. These actions quickly undermined the very fragile diplomatic truce.
Ghana, as an oil-importing and oil-exporting nation, is highly sensitive to changes in global oil prices. Higher crude oil prices translate into increased costs for imported refined petroleum products, potentially worsening inflation. This can affect transportation costs, manufacturing, and consumer spending across the Ghanaian economy. The Bank of Ghana closely monitors inflation, which has been a persistent challenge for the country's economic stability.
Iran's foreign ministry stated the overnight attacks violated the ceasefire, making it "practically meaningless." It blamed the US for the "extremely serious consequences of this criminal act." UN Secretary-General António Guterres expressed concern, stating the Middle East is "being pulled deeper into crisis."
Going forward, global markets will closely watch developments in the Middle East. Further escalation could lead to sustained higher oil prices, impacting inflation forecasts globally and in Ghana. Decision-makers and central banks, including the Bank of Ghana, will monitor these geopolitical tensions for their potential effect on economic stability and monetary policy. The integrity of shipping routes like the Strait of Hormuz remains a key concern for international trade.
US President Donald Trump had warned of further attacks if a deal was not reached with Iran. He stated, "We hit them hard yesterday and we're going to hit them hard again today." US Defence Secretary Pete Hegseth added that Iran had not taken its chance to make a deal. Iranian President Masoud Pezeshkian maintained that Iran would "stand firm against any pressure or threat."
The US military had previously targeted the Palau-flagged MT Settebello oil tanker. This occurred on Wednesday after it allegedly attempted to transport oil from Iran, violating an American blockade. US forces fired "precision munitions" into the tanker's engine room after the crew did not follow directions. This highlights efforts to enforce sanctions on Iranian oil exports.
The Strait of Hormuz is crucial, with about 20% of the world's oil and liquefied natural gas passing through it. This includes oil from major Gulf states such as Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates. Any disruption in this strait has significant global economic implications, potentially causing widespread fuel shortages and price hikes.