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Oil prices surged to their highest levels since the war in Ukraine in 2022, sparking global concern amid reports that the U.S. military will report to President Donald Trump on new options for dealing with Iran. Axios News Agency reported that the U.S. Central Command (CENTCOM) has planned several “short-range, powerful” attacks aimed at ending the deadlock in negotiations with Iranian authorities. The BBC contacted the Pentagon and the White House for comment. But the potential impact extends beyond just rising fuel prices. Experts say this mechanism is a chain reaction: as oil prices rise, the effects spread throughout the global economy. Naveen Das, a senior oil analyst at Kpler, a trade data analytics firm, said that the rise in oil prices “has ripple effects not only on oil itself, but also on oil-related products, inflation, and every aspect of our daily lives.” He added, “We may start seeing headlines again about attempts to de-escalate the conflict.”
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Oil Price Has Increased
This is where it all began. Crude oil prices rose due to supply concerns, geopolitical conflicts, or market speculation. Brent crude oil prices surged nearly 7% for a moment, rising above $126 (approximately 4,100 baht) per barrel, before falling back to around $116 (approximately 3,700 baht) in European trading. The higher prices this week are due to the stalled peace efforts between the US and Iran, and the continued closure of the Strait of Hormuz, which has also resulted in higher fuel costs for drivers. Before the US and Israel attacked Iran, Brent crude oil prices were around $70 per barrel, or 80% below Thursday’s peak. Crude oil is a key component of gasoline and diesel, meaning that higher wholesale prices will quickly impact the price of fuel sold at the gas station. Brent crude futures for June delivery were trading at 11:00 PM Greenwich Mean Time (GMT) on Thursday (6:00 AM Thailand time), while the more actively traded July contract was at around $110 (approximately 3,500 baht) per barrel. A futures contract is an agreement to buy or sell an asset at a fixed price in the future.
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The price of Oil-Related Product have Increased
Oil is not Oil is not only used as fuel, but also as a key raw material in a wide variety of products. Therefore, rising crude oil prices will lead to higher production costs in various industries, such as aviation fuel, plastics and packaging, as well as chemicals and fertilizers. Governments around the world have warned that households may face higher energy costs, food prices, and airfares as a result of the ongoing conflict. Some airlines have already raised fares or reduced flight routes. Fertilizer prices have also increased, which could ultimately lead to higher food costs. Susannah Streeter, head investment strategist at investment advisory firm Wealth Club, said costs may remain high well into next year. “Transports of urea, used in fertilizer production, have been blocked, and costs have skyrocketed for farmers worldwide who haven’t stockpiled in advance,” she explained. “The worrying thing is that these costs will be passed through the supply chain, driving up the prices of everyday goods later this year and next.”
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Transportation Cost has Increased
Because almost every industry relies on transportation, including food, consumer goods, and raw materials, higher fuel costs directly contribute to increased transportation expenses. As global shipping costs rise, businesses often pass those costs on to consumers, further pushing retail prices higher.
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The inflation rate increased
These rising costs are accumulating and intensifying across the global economy. As energy prices rise, businesses face higher operating costs, from factory machinery operation to building air conditioning and goods transportation. Food prices have also increased because farming, packaging, and distribution all depend on fuels and fertilizers linked to oil. Everyday consumer goods, from clothing to electronics, also have higher production and delivery costs. When these costs rise across multiple sectors simultaneously, price pressure spreads and lasts longer. When this pattern continues—instead of a short-term surge, as economists describe it—it becomes inflation, a general and sustained increase in the cost of living. “The whole world is facing this. Some countries are experiencing it more, while others are experiencing it less,” said Andre Perfeto, a Brazilian economist and head of the consulting firm APCE. “For example, Brazil is experiencing significant problems,” he said, adding that Brazil’s inflation rate has remained consistently above the central bank’s target range for several months. After Brazil’s annual inflation rate peaked above 5% in mid-2025, it gradually declined but remained high, stabilizing at around 4.3%–4.4% in early 2026, still close to the inflation target of 3%. Brazil’s inflation rate is currently projected to end the year at 4.86%, according to the latest forecast from the country’s central bank, due to conflicts in the Middle East. Many other countries are also experiencing similar inflationary trends.
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Impact of Daily Life
At the household level, rising oil prices affect daily life in many ways, including higher household expenses, more expensive commutes to work, and increased utility bills. As the cost of living rises, workers may seek higher wages to keep up with increased expenses, which can further increase inflationary pressure. In response to this situation, central banks may raise interest rates to control inflation, make mortgages and loans more expensive, and reduce spending and borrowing. In some countries, such as Pakistan and Bangladesh, governments have ordered schools to close in order to save on fuel costs and reduce expenses. “All of this is creating a gap that leads to a global economic slowdown and recession,” Perfecto said. “There’s not much thought involved in short-term solutions. I don’t believe Trump will relax this, or at least not now,” he added. In its latest World Economic Outlook report, the International Monetary Fund (IMF) warned that the conflict in Iran could “go off track” the global economy, with a prolonged escalation of the conflict increasing the risk of a global recession. It also prompted central banks to be cautious in raising interest rates in response to higher inflation. However, U.S. Treasury Secretary Scott Basen told BBC News that “a little economic pain in the coming weeks” makes sense if it helps reduce the risk of Iran developing nuclear weapons. “I’m more concerned about the short-term impact than the long-term security concerns,” he added.
Read more at: https://www.bbc.com/thai/articles/cj4pvxvy417o