Iran has warned of retaliation against any further military actions by the United States, raising concerns about the impact on international oil prices and global financial markets. With international oil prices exceeding $117 per barrel, there are predictions that high prices could fuel inflation and bolster arguments for a U.S. interest rate hike by the end of the year. The outcome of U.S.-Iran negotiations and the flow of crude oil supply are seen as key variables for financial markets.
On November 2, the International Financial Center reported that an Iranian military spokesperson warned that the U.S. would face much broader retaliation if it engages in further provocations. Concerns are growing among Middle Eastern countries as speculation rises about the possibility of U.S. President Donald Trump resuming strong military strikes against Iran.
This military tension could also affect international oil prices. An escalation of conflicts in the Middle East could lead to disruptions in major oil transport routes and increased supply concerns. As of October 30, Brent crude oil was priced at $117.64 per barrel, a 0.79% increase from the previous week.
There remains a possibility for negotiations between the U.S. and Iran. Iranian Foreign Minister Abbas Araghchi stated that discussions with the U.S. are ongoing with mediation from Qatar, although a final agreement has not yet been reached. The Pakistani military recently reported two meetings with senior Iranian officials, expressing cautious optimism about reaching a deal.
So far, the actual impact on crude oil supply has been limited. According to oil market analysis firm Kpler, crude oil exports through the Strait of Hormuz fell by 2% last month to 11.1 million barrels per day. Despite an increase in Iranian ship attacks, the analysis suggests that the impact on oil exports has not been significant. The Organization of the Petroleum Exporting Countries Plus (OPEC+) has also decided to maintain its oil production targets for December.
However, if military tensions persist or conflicts escalate, concerns about future disruptions to oil supply could grow. Sustained high international oil prices could continue to exert upward pressure on inflation, potentially influencing U.S. monetary policy. Analysts suggest that if oil prices do not significantly decline, calls for a U.S. interest rate hike by the end of the year may increase.
The upcoming U.S. employment report for October, scheduled for release on November 6, is also a key variable. The market anticipates that non-farm payrolls will increase by 65,000, surpassing the previous month's increase of 29,000. If the labor market shows stronger-than-expected resilience and inflationary pressures from high oil prices persist, concerns about monetary tightening could intensify. At the time of writing, the Chicago Mercantile Exchange (CME) FedWatch tool reflected a 72.0% probability of a rate hike in December.
* This article has been translated by AI.
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