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RBA rate-hike odds rise as Hormuz risk pushes oil prices higher
Brent crude is up 23% in two weeks, and diesel in Australia has risen to about $2.10 a litre in July while petrol is around $1.75, according to the report.
The escalation of the US-Iran conflict is increasing expectations that Australia’s Reserve Bank may need to raise interest rates, as renewed threats to the strait of Hormuz raise fuel price pressure, Guardian Economics reports. The outlet cites market forecasts indicating the likelihood of an RBA rate hike has doubled. It links the shift to a surge in Brent crude, which has risen 23% over the past two weeks and is back near $90 a barrel.
The report says global supply conditions are already strained, noting dwindling oil reserves and warnings about a potential tipping point if Iran enters a prolonged “full-scale” war and the Houthi group threatens to block millions of barrels of Saudi oil moving through the Red Sea. In Australia, motorists are facing higher costs, with diesel jumping by 40 cents in July to about $2.10 a litre in major east coast cities, according to Motormouth, and unleaded petrol rising by 25 cents since the start of the month to about $1.75 after some federal fuel excise relief was removed.
Latest closeWTI crude $87.52 ▲3.1%|Brent $94.43 ▲3.8%