Oil prices soared on Friday as tensions in the Middle East flared, with Israel attacking Iranian military and nuclear targets and Iran retaliating.

A sustained surge in oil prices is likely to complicate the U.S. fight against inflation. A $10-a-barrel increase would boost year-over-year growth in the Consumer Price Index by 0.5 percentage points,

"A sustained $10 increase in oil prices is expected to increase inflation by 0.4% and lower GDP by 0.4%": Apollo Global Management 's ( APO -4.34%) chief economist Torston Slok says oil is fueling U.S. stagflation fears, adding to the effect expected from import tariffs.

Despite high inflation expectations, price pressures have steadily cooled, with May’s CPI at just 2.4%. This suggests public sentiment may be overreacting to tariff headlines.

Asian shares are mixed and oil prices have climbed further as escalating Iran-Israel tensions threaten to disrupt supplies of crude

A sustained rise in the price of crude oil, which jumped sharply after Israel attacked Iran, could hurt consumers and President Trump’s efforts to bring down energy costs.

The Israel-Iran war is now five days old, and the immediate impact is a crude oil price hike. From an average of $61-$62 per barrel from early April to early June 2025, West Texas Intermediate (WTI) crude quickly jumped to $68-$73 per barrel from June 13 onwards.

US and Brent crude prices jumped on fears of supply disruption from the Middle East as Iran has repeatedly threatened to close a key shipping route.

Oil prices are leaping, and stocks are weakening on worries that Israel’s attack on Iranian nuclear and military targets could escalate further and damage the flow of crude around the world, along with the global economy.

Oil prices leaped, and stocks slumped on worries that escalating violence following Israel’s attack on Iranian nuclear and military targets could damage the flow of crude around the world, along with the global economy.

That sent the yield on the 10-year Treasury up to 4.43% from 4.36% late Thursday. Higher yields can tug down on prices for stocks and other investments, while making it more expensive for U.S. companies and households to borrow money.

The Federal Reserve is widely expected to hold interest rates steady next week, with investors focused on new central bank projections that will show how much weight policymakers are putting on recent soft data and how much risk they attach to unresolved trade and budget issues and an intensifying conflict in the Middle East.