Global markets rise, oil prices retreat despite Iran war escalation
Global News
U.S. benchmark crude fell US$1.24 to US$94.53 per barrel. Brent crude, the international standard, rose to US$104.17 per barrel. That's down from more than US$106 on Monday.
Wall Street followed global markets higher Wednesday and the price of U.S. crude fell eased despite a new barrage of attacks by Iran on its Gulf neighbors.
Futures for the S&P 500 and the Dow Jones Industrial Average each rose 0.5 per cent ahead of the Federal Reserve’s decision on interest rates later in the day. Nasdaq futures climbed 0.6 per cent.
U.S. benchmark crude fell US$1.24 to US$94.53 per barrel. Brent crude, the international standard, rose 75 cents to US$104.17 per barrel. That’s down from more than US$106 on Monday.
With higher oil prices feeding into other inflation, the Fed is widely expected to keep rates on hold Wednesday.
The Fed will also release a set of quarterly projections, which could result in the central bank trimming its forecast of one rate cut this year, to zero. Though seemingly a minor adjustment, it would be a major course correction after 18 months of on-again, off-again rate cuts.
The Iran war has made it a particularly difficult time for policymakers to issue economic projections. Gas prices are soaring and will push up inflation for at least the next month or two. The average price for a gallon of gasoline spiked again overnight, reaching US$3.84. A gallon of gas last month, before the U.S. and Israel attacked Iran, was well under US$3.
Many economists expect the Fed will forecast that inflation will remain as high as three per cent even by late 2026, well above its December projection of 2.6 per cent. An increase of that magnitude could be hard to square with more interest rate cuts.
Iran lashed out Wednesday with multiple attacks on its Gulf neighbors and Israel following the killing of one of its top leaders in an airstrike. Iran’s missiles evaded air defenses, killing two near Tel Aviv.
Canada produced on average 5.3 million barrels per day of crude oil in 2025, according to the Canada Energy Regulator, making the upcoming production jump a 2.6 per cent increase.
Iran's foreign minister said the U.S. attacked Kharg and Abu Musa islands from locations in the United Arab Emirates, a claim the UAE rejected.
Citing "a more contested environment", British Prime Minister Keir Starmer and his Irish counterpart Micheal Martin said the exercises would begin in September.
Only one in four (23 per cent) Canadians approve while, 16 per cent are unsure either way. Forty-two per cent were found to strongly disapprove.
Countries around the world are grappling with skyrocketing costs for key commodities like oil and fertilizer as the war with Iran continues to upend global trade.
The U.S. Central Command said the crash followed an unspecified incident involving two aircraft in “friendly airspace,” and that the other plane landed safely.
Water treatment centres in the Persian Gulf region are under threat amid the Iran war, with desalination plants in areas like Bahrain taking damage from strikes.
John Gradek said that the price of jet fuel is up about 30 per cent and the cost of fuel represents about 30 per cent of an airline's operating costs.
Iran's unrelenting attacks on shipping traffic and energy infrastructure in the Persian Gulf pushed oil back above $100 a barrel on Thursday.
Concerns were raised in a document sent to British Prime Minster Keir Starmer in December 2024 when he was considering appointing Peter Mandelson.
Canada and a group of dozens of other countries have agreed to release 400 million barrels of oil from their strategic reserves as the Iran war threatens the global supply.
Iran's military command said on Wednesday the world should be prepared for oil to hit US$200 a barrel, as three more ships came under attack in the blockaded Gulf.
Iran launched new attacks against Israel and Gulf Arab countries, while Israel carried out airstrikes on Iran and Lebanon, where it is battling Hezbollah militants.