The growing tensions between the U.K. and Iran is being felt in the markets particularly with regards to crude oil prices that have been rising for the seventh consecutive day. Not surprising considering that a quarter of world oil supplies flow through the straights where the British sailors and marines were seized. Added to the inflating geopolitical risk premium are the
Marseilles port strikes and growing worries regarding weather forecasts for the summer season in the U.S., particularly in Florida and the Gulf of Mexico where 30% of U.S. oil is extracted. This potent and highly charged cocktail of disruptive issues could very easily drive prices to the levels we saw last year. Given these developments, it seems that inflation worries, particularly in the U.S. will be with us for a while longer.
