Rising Diesel Costs Threaten US Inflation Outlook as Middle East Tensions Persist

Crude oil prices are hovering near six-week highs as escalating hostilities between the U.S. and Iran disrupt maritime traffic in the Strait of Hormuz. The ongoing conflict has rattled energy markets, with Brent crude reaching $97.93 earlier in the session—its highest level since July 24—before settling slightly to $96.19. Similarly, U.S. West Texas Intermediate (WTI) is trading near $91.03 per barrel. These gains follow a volatile week that saw Brent surge approximately 8% and WTI climb nearly 10%. Analysts warn that the sustained spike in diesel and oil prices could act as a significant barrier for those hoping for cooling U.S. inflation. The supply concerns were further exacerbated over the weekend after U.S. Central Command confirmed strikes on three Iranian oil tankers, including a vessel near Kharg Island.