Oil Blows Past $100, Then Nearly $110, as the Fed Edges Toward Its First Hike in Three Years
Nifty closed the week at 23,398.10, down 2.09% — its fifth consecutive weekly decline. The reason needs little explanation: after a month of merely reigniting, the Iran war properly exploded this week. The US destroyed five Iranian oil tankers, Iran struck at American naval vessels, Yemen's Iran-aligned militants hit energy facilities inside Saudi Arabia, and shipping through the Strait of Hormuz collapsed to a trickle — two vessels a day, against dozens in normal times. Brent crude, which had closed last Friday near $96, touched almost $110 by Thursday night before easing to around $106 by Friday. That alone would have filled most weeks' quota of news. But Friday's US inflation report did something arguably just as consequential: it pushed the odds of a Federal Reserve rate hike on September 16 to roughly 90% — a move that, if it happens, would be the Fed's first in more than three years. Gold, supposedly the one asset that loves a war, spent the week falling. And India's auto industry quietly logged its best August on record. Both stories got buried under the oil headlines.
−2.09% — fifth straight losing week
Touched near $110 this week — highest since May
Weakest in weeks as oil costs bite
Best-ever August — up 17.5% YoY
It was the week the Iran war stopped being a market side-story and became the only story. The US destroyed five Iranian oil tankers in retaliation for an attempted strike on an American warship; Iran had already hit at US Navy vessels a day earlier; by midweek, Yemen's Iran-aligned militants were striking energy facilities inside Saudi Arabia, and shipping through the Strait of Hormuz — usually a non-stop procession of tankers — had slowed to about two vessels a day. Brent crude, which closed last Friday near $96, ground higher all week, touching nearly $110 on Thursday night before easing to around $106 by Friday. Nifty fell every session but one, closing at 23,398.10, down 2.09% for a fifth straight losing week; Sensex shed 1,734 points to 74,781.76. Wall Street had its own rough patch, falling for four consecutive sessions as the 10-year Treasury yield pushed to its highest level since 2023 — before Friday's inflation report landed hotter than hoped on its core reading, pushing the odds of a September 16 Fed rate hike to roughly 90%. If it happens, it will be the Fed's first hike in more than three years. Gold, oddly, spent the week falling. The rupee gave back the whole of last week's surprise rally. And almost nobody noticed that India's auto industry had just posted its best August on record.
Oil Blows Past $100 as Shipping Through the Strait Nearly Stops
Five Iranian tankers destroyed, Saudi energy facilities struck, and a route carrying a fifth of the world's oil slows to a trickle
Last week's edition closed with Brent near $96 and the Iran-US conflict freshly reignited after a month's lull. This week, it stopped being a slow burn. Early on, reports surfaced that Iran had launched a second, previously undisclosed wave of attacks on US Navy ships, and Yemen's Iran-aligned militants struck several energy facilities inside Saudi Arabia, forcing a temporary halt to some operations there — broadening a war that had, until now, stayed mostly bilateral. Brent pushed above $99 in after-hours trading. Then came the sharpest single move of the week: the US military destroyed five Iranian crude oil tankers in retaliation for an attempted attack on an American warship. Central Command said the warship evaded the strike and no one was harmed. Brent settled above $101, its highest close since May 22, while a senior Iranian official vowed Tehran was ready for "a more intense conflict" rather than yield to what it called a US naval blockade.
By Thursday, the damage to actual shipping was becoming the story in its own right. The Strait of Hormuz, which normally carries roughly a fifth of the world's oil on a non-stop procession of tankers, saw just eight vessels cross on Wednesday — a figure that fell to two in the following 24 hours, a little over 3% of pre-war traffic. Brent touched $105 that day, its highest since May, and briefly traded near $110 in Thursday-night dealing as the 10-year US Treasury yield pushed to 4.95% — its highest level since 2023, not the two-decade high it can look like at a glance. Goldman Sachs raised its Brent and WTI forecasts and warned that Brent could climb above $120 in 2027 if Gulf output stays several million barrels a day below pre-war levels — not the bank's base case, but no longer a fringe one either. By Friday, some of the week's gains unwound as profit-taking set in and Brent eased back toward $106, snapping a five-session winning streak. Even after that pullback, the week's gain stood close to 8-9%, and Brent remains up roughly a fifth over the past month and more than half over the past year.
Reports of a fresh Iranian strike on US Navy vessels surface; Yemen's Iran-aligned militants hit Saudi energy facilities; Brent extends to above $99 after hours.
The US destroys five Iranian crude tankers after an attempted strike on an American warship. Brent tops $101 — its highest close since May 22.
Shipping through the Strait falls to roughly 3% of normal traffic. Brent hits $105, briefly trades near $110; the 10-year Treasury yield hits its highest level since 2023.
Profit-taking snaps a five-day Brent winning streak; oil eases to around $106. The week's gain still stands close to 8-9%.
One detail cuts through the week's noise more than any price chart: US officials reportedly warned President Trump that the conflict, now in its seventh month since the initial US-Israel strikes on Iran in late February, could run through the remainder of his term — into 2029. Iranian leaders, for their part, are said to view the fight as existential and prepared to continue despite the mounting economic cost to their own country. Markets have spent the year pricing this war as a series of discrete shocks; increasingly, it looks like something with no obvious endpoint.