ESCALATING military tensions between the United States and Iran have reignited concerns over global energy security, sending crude oil prices above US$74 per barrel and heightening expectations that persistent inflation could delay any easing of US monetary policy.
The latest market reaction followed confirmation by the US military that it had conducted a second consecutive day of strikes against Iranian targets, as Washington intensified efforts to curb Tehran's ability to threaten international shipping through the Strait of Hormuz.
The renewed military action came after a series of attacks on commercial tankers transiting the strategic waterway, one of the world's most important routes for global oil exports.
US authorities said the strikes were designed to weaken Iran's capability to disrupt freedom of navigation in the Strait of Hormuz, while Tehran responded by pledging a large-scale retaliatory campaign targeting American military bases across the Middle East.
Adding to investor uncertainty, US President Donald Trump declared that the temporary ceasefire between Washington and Tehran had effectively ended.
"As far as I'm concerned, the ceasefire is over," Trump said, while warning that the United States could launch further military strikes and impose a blockade on Iran's ports.
Trump also cautioned that oil prices could continue climbing and indicated that future operations could target Iran's principal oil export hub on Kharg Island, through which the majority of the country's crude exports are shipped.
The renewed hostilities have intensified fears that the collapse of the interim US-Iran peace arrangement could once again disrupt global energy supplies, placing the Strait of Hormuz at the centre of an increasingly volatile geopolitical confrontation.
Against that backdrop, international benchmark crude prices climbed above US$74 per barrel on Thursday, marking a third successive day of gains as traders factored in the growing risk of supply interruptions from the Middle East.
Despite heightened geopolitical uncertainty, the US dollar index remained broadly steady around the 101 level as investors balanced safe-haven demand against evolving expectations for US monetary policy.
However, the sharp rise in energy prices has revived concerns that inflationary pressures could prove more persistent than previously anticipated, prompting markets to reassess the outlook for interest rates.
The ringgit opened higher against the US dollar on Thursday, strengthening to 4.0730/0800 from Wednesday's closing rate of 4.0750/0800.
Traders significantly increased expectations that the US Federal Reserve would tighten monetary policy further, with the implied probability of a September interest rate increase rising to approximately 69 per cent, compared with 58 per cent a day earlier.
Minutes from the latest Federal Open Market Committee meeting reinforced market caution, revealing that policymakers remained divided over the appropriate path for future interest rates while considering a range of possible economic scenarios amid continuing uncertainty over inflation and growth.
With geopolitical tensions showing little sign of easing, investors are expected to remain focused on developments in the Middle East, particularly any disruption to shipping through the Strait of Hormuz, which remains one of the world's most critical energy chokepoints. - July 9, 2026
