Biggest single-day increase in 6 years! International oil prices rekindle inflation concerns, and the risk of global central banks becoming "hawkish" rises
The situation in the Middle East and the Strait of Hormuz changed again, causing international oil prices to soar nearly 10% on Monday (13th), recording the largest single-day increase in 2020. During the Asia-Pacific trading session on Tuesday (14th), oil prices rose another 2%, approaching a one-month high. Global inflation concerns have reignited. According to Xinhua News Agency, citing US media reports on the 13th, Trump has officially notified Congress that the war in Iran has resumed. Earlier that day, Trump posted on social media that the United States would resume its maritime blockade against Iran and charge a 20% fee on all goods transported through the Strait of Hormuz.
The situation in the Middle East and the Strait of Hormuz changed again, causing international oil prices to soar nearly 10% on Monday (13th), recording the largest single-day increase in 2020. During the Asia-Pacific trading session on Tuesday (14th), oil prices rose another 2%, approaching a one-month high. Global inflation concerns have reignited. According to Xinhua News Agency, citing US media reports on the 13th, Trump has officially notified Congress that the war in Iran has resumed. Earlier that day, Trump posted on social media that the United States would resume its maritime blockade against Iran and charge a 20% fee on all goods transported through the Strait of Hormuz. Brent oil records biggest single-day gain in 2020 During the Asia-Pacific trading session on the 14th, oil prices continued their strong gains. Brent crude oil futures expiring in September rose 2.1% to US$85.01/barrel; WTI crude oil futures also rose 2.1% to US$79.78/barrel, both hitting highs in the past month. On the previous trading day, Brent crude oil futures rose 9.6%, recording the largest single-day increase since May 2020. WTI crude oil futures rose 9.4%, recording the fourth largest single-day gain since 2026. Yuting Shao, senior global macro strategist at Manulife Investment Management, told China Business News that although shipping volume in the Strait of Hormuz has increased compared with before, uncertainty will continue. Andy Lipow, president of Lipow Oil Associates, said the market had been expecting stronger supplies following the signing of a U.S.-Iran memorandum of understanding last month, but that optimism has faded. Goldman Sachs said in a note to clients that new and expanded pipelines would allow more than 45% of pre-conflict Gulf oil exports to bypass Hormuz by the end of 2027. If plans are accelerated, the pipeline will cover 75% of the region's oil exports by the end of 2028. More investors choose to stay away from the crude oil trading market for the time being. Recent futures trading data shows that hedge funds and other investors have taken fewer long and short positions in crude oil, reducing market liquidity or the ability to trade at expected prices. "Uncertainty - whether short-lived or more permanent - appears to be keeping a large portion of market participants on the sidelines," analysts at ING wrote in a note to clients. Global inflation concerns reignite The surge in oil prices has rekindled market concerns about inflation risks and has spread to the broader financial market. Adding to the market's concerns about the profitability of technology stocks and semiconductor stocks, investors are also reassessing the potential impact of rising energy costs on global economic growth and central bank monetary policies. Liu Peiqian, Asia economist at Fidelity International, told China Business News that energy shocks and the AI investment boom will reshape global and Asian markets. These two forces are also reshaping global inflation trends, fiscal policies and capital allocation, especially in the Asia-Pacific region. In the future, the world may enter an era of higher structural inflation, higher bond yields, and more obvious policy differentiation, which is very different from the market environment that investors are familiar with after the global financial crisis. "Over the past 20 years, globalization, low-cost energy, and highly integrated supply chains have jointly created a low-inflation environment, allowing central banks to maintain low interest rates and a relatively stable macroeconomic environment. However, this framework is gradually disintegrating. The fragmentation of the geopolitical landscape and the rapid expansion of AI infrastructure are driving the global economy to transform into a capital-intensive and supply-constrained model." He said, "As global market volatility continues to rise, and the impact on Hormuz The issue of energy resilience is being re-examined as the potential impact on key energy corridors such as the Strait, Greenland Sea Route, Red Sea and Panama Canal increases. Rising geopolitical risks have driven significant increases in shipping costs, insurance rates and oil price volatility. Governments are increasingly prioritizing energy security over cost efficiency, marking a major shift in policy thinking. This change will benefit commodity exporters and energy producers, especially companies related to energy, industrial metals and critical minerals.” For Asia, he said that economies centered on AI infrastructure construction, energy security investment, and strategic manufacturing development are expected to be the winners in the next stage.
Invesco Asia Pacific global market strategist Zhao Yaoting told China Business News at the end of June that the tail risks that are most likely to be ignored by the global market in the second half of this year are mainly two risks, one of which is the possible resurgence of global inflation. "European defense spending, U.S. tax cuts, Japanese consumer subsidies and other fiscal stimulus, coupled with the uncertainty of the situation in the Middle East, these factors may cause inflation to rise again." He said, "The main derivative risk arising from this is that the hawkish stance of the world's major central banks has once again heated up. The renewed rise in inflation, whether in Japan, the United States or Europe, may have a chain reaction, or lead to central banks adopting tightening policies. This is a relatively large risk seen in our investment outlook. If there are more interest rate hikes in the future, it will inevitably affect asset prices." Shao Yuting told reporters that the latest situation in the Middle East has strengthened the market's expectations that higher energy prices may keep inflation high, and central banks around the world will "maintain higher interest rates for a longer period of time." For the Fed, she believes that the Fed still faces a dilemma. But the good news is that inflation expectations have not yet risen. After Federal Reserve Governor Christopher Waller made "hawkish" remarks, the market has currently priced in a 43% probability of raising interest rates at the Federal Reserve's July 28-29 policy meeting. Investors are currently awaiting the release of U.S. consumer price data for June and Federal Reserve Chairman Kevin Warsh's testimony before Congress later on Tuesday for more clues on the outlook for the Fed's monetary policy. Paul Conway, chief economist of the Reserve Bank of New Zealand, said on the 14th that the recent situation in the Middle East has increased the upward risks to the inflation outlook. If businesses continue to pass on rising costs to consumers, stubborn inflationary pressures may require further tightening of monetary policy. The biggest risk is that short-term increases in energy and petrochemical prices spread to broader inflation as households and businesses begin to expect high inflation to persist. (
Invesco Asia Pacific global market strategist Zhao Yaoting told China Business News at the end of June that the tail risks that are most likely to be ignored by the global market in the second half of this year are mainly two risks, one of which is the possible resurgence of global inflation. "European defense spending, U.S. tax cuts, Japanese consumer subsidies and other fiscal stimulus, coupled with the uncertainty of the situation in the Middle East, these factors may cause inflation to rise again." He said, "The main derivative risk arising from this is that the hawkish stance of the world's major central banks has once again heated up. The renewed rise in inflation, whether in Japan, the United States or Europe, may have a chain reaction, or lead to central banks adopting tightening policies. This is a relatively large risk seen in our investment outlook. If there are more interest rate hikes in the future, it will inevitably affect asset prices." Shao Yuting told reporters that the latest situation in the Middle East has strengthened the market's expectations that higher energy prices may keep inflation high, and central banks around the world will "maintain higher interest rates for a longer period of time." For the Fed, she believes that the Fed still faces a dilemma. But the good news is that inflation expectations have not yet risen. After Federal Reserve Governor Christopher Waller made "hawkish" remarks, the market has currently priced in a 43% probability of raising interest rates at the Federal Reserve's July 28-29 policy meeting. Investors are currently awaiting the release of U.S. consumer price data for June and Federal Reserve Chairman Kevin Warsh's testimony before Congress later on Tuesday for more clues on the outlook for the Fed's monetary policy. Paul Conway, chief economist of the Reserve Bank of New Zealand, said on the 14th that the recent situation in the Middle East has increased the upward risks to the inflation outlook. If businesses continue to pass on rising costs to consumers, stubborn inflationary pressures may require further tightening of monetary policy. The biggest risk is that short-term increases in energy and petrochemical prices spread to broader inflation as households and businesses begin to expect high inflation to persist. (