Oil prices have surged after Israel launched an attack on Iran’s nuclear programme with financial markets anxious over retaliatory action.
The price of Brent crude jumped nearly 10% higher at one stage before easing back a little to stand 7% higher at $74 a barrel. Energy traders will be watching to see whether Iran retaliates in the coming days.
The cost of crude oil affects everything from the price of food at the supermarket to how much it costs to fill up your car.
The founder and CEO of Sommerville Advisory Markets, Paul Sommerville, said inflation data in the US during the week was “absolutely frigid, very cold”, but he added that the markets were expecting that.
“Oil prices have actually gone up about 40% since early April, the markets are anticipating that more inflation is going to be coming through the system, so it’s just exacerbated this morning,” said Mr Sommerville.
“The markets were already anticipating that and that’s why bond yields were trading higher and the dollar’s trading lower,” he stated.
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He said that because of the spend that Donald Trump is doing, because of the way the US is handling or mishandling their finances, the markets are anticipating more inflation into the system – that is just showing with those oil prices up 40% since April.
The dollar sank to a three-year low yesterday after President Trump said he will send out letters with trade deal terms.
The euro on the other hand soared to its highest level in almost four years against the dollar.
“The dollar has fallen by the 11% since the start of 2025 – that means for US tourists coming to Ireland this summer our prices are 11% higher for those guys who are spending the money in the economy here,” Mr Sommerville said.
“Also for our exports going over to the US, that’s a 11% headwind in 2025 before tariffs are even contemplated, so you can see that the pressure is coming on the dollar and also on bond yields and the reason being is because the mismanagement of the US economy,” he concluded.
