BRENT crude broke above US$100 a barrel on Thursday for the first time since May as the intensifying US-Iran conflict heightened fears of further disruption to Middle East energy supplies and raised the prospect of prolonged inflationary pressure.
Brent climbed towards US$102 a barrel, while US crude approached US$97, after Iran vowed to resist a US naval blockade and warned it would intensify attacks if American forces continued striking Iranian territory.
Iran said it was ready for a more intense conflict, while US President Donald Trump predicted that the war would not end until after the November midterm elections, signalling little prospect of an immediate de-escalation.
Trump also said significant relief in gasoline prices was unlikely before the elections, adding to concerns over the impact of sustained higher energy costs on consumers and inflation.
The latest escalation follows about a month of relative calm, with both sides stepping up attacks over the past week.
The conflict has also spread beyond Iran after Iran-backed Houthi militants attacked several energy facilities in Saudi Arabia, prompting a temporary suspension of some operations.
The prospect of prolonged hostilities and tighter energy supplies has intensified concerns over inflation and complicated the outlook for global interest rates.
Meanwhile, the US dollar index held around 98.8 on Thursday, pausing its recent decline as investors awaited key inflation data that could influence the Federal Reserve's next interest-rate decision.
The US producer price index for August is due later on Thursday, followed by consumer inflation data on Friday. Weekly jobless claims and existing home sales figures are also scheduled for release.
Markets are pricing in roughly a 60 per cent probability of a 25-basis-point Federal Reserve rate cut next week, following stronger-than-expected jobs data.
US Treasury yields also surged after the Treasury Department announced plans to buy back up to US$6 billion in longer-term debt, three times the usual amount, although the move disappointed some investors who had expected a larger increase.
The dollar's strength was reflected in the ringgit market, with the US dollar trading at RM4.0731 on Thursday, up 0.09 per cent from the previous session.
The dollar-ringgit pair has gained 0.47 per cent over the past four weeks, although it remains 3.53 per cent lower over the past 12 months.
Analysts' expectations project the US dollar-ringgit exchange rate at RM4.0394 by the end of the quarter and RM3.9735 in one year. - September 10, 2026
