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As the airstrikes on Iran by the United States and Israel enter a third week, oil prices have risen to US$100 a barrel as ships are unable to make it out of the Strait of Hormuz.

Rising international oil prices will lead to inflationary pressure here in Jamaica, where a tenth of the country’s GDP goes into paying for imported energy.

US Energy Secretary Chris Wright says oil prices may not fall soon. Goldman Sachs is of the view that oil prices will remain above $US100 a barrel for the remainder of the month of March. 

JP Morgan says if oil remains above US$90 per barrel, it could ignite a “ domino effect” that sees the S&P 500 dropping by 15 per cent.

As much as 14 million barrels of crude oil pass through the 21-mile-wide Strait of Hormuz a day. Iran has declared that any ship that attempts to pass through the Strait without its permission will be attacked.

Earlier today, President Donald Trump said he was not ready to discuss the terms for a ceasefire and that the airstrikes would continue until Iran unconditionally surrendered.  It has been reported that the conflict is costing Washington US$1 billion a day. 

The President of the United States has deployed 5,000 marines and soldiers to Iran as he steps up pressure and looks to end the conflict within four weeks.

The International Energy Agency (IEA) will be releasing 400 million barrels of reserve oil to ease supply problems. The IEA has warned that this war is creating the biggest supply disruption in the history of the oil market.

Today, gas prices at the pump in the US rose to US$3.70 a gallon and are likely to climb to $4 per gallon next week. 

Renowned analytics firm Wood Mackenzie wrote: “In our view, US$200/bbl is not outside the realms of possibility in 2026.”

Next week, the Federal Reserve is expected to make an announcement on its policy rate as Chairman Jerome Powell draws near the end of his tenure. He has been particularly cautious about inflationary impacts and has not moved to aggressively reduce interest rates, much to the chagrin of US President Donald Trump.

With oil prices in the triple-digit range, Powell is more likely to draw back rather than make a move to reduce the policy rate in any meaningful way. There’s just too much turbulence and uncertainty in the world economy right now.

President Trump has dismissed concerns about rising oil prices and sees it as a temporary aberration. He says focus must be placed on toppling the Iranian regime.

He is calling on allies and world power players to help keep the Strait of Hormuz open and remove any danger to international shipping.

“Hopefully, China, France, Japan, South Korea, the UK and others that are affected by this artificial constraint will send ships to the area so that the Hormuz Strait will no longer be a threat from a nation that has been totally decapitated. One way or the other, we will soon get the Hormuz Strait open, safe and free!” wrote President Trump on his Truth social media platform.