Oil prices rose about 3% as the military escalation between Washington and Tehran renewed last night and after the US strikes against Iran against the backdrop of the targeting of ships and cargo tankers in the Strait of Hormuz.

Oil prices ended Tuesday higher, with Brent crude futures up $2.17 to settle at $74.16 a barrel, according to official data from energy markets.

U.S. West Texas Intermediate crude rose to close at $70.44 a barrel, and U.S. crude extended gains in early trading on Wednesday to $72.39 a barrel.

The sharp rise followed a wave of concerns in the economic community about the security of navigation and global energy supplies after trade corridors were directly threatened.

Oil blockade

Oil prices have backed a tough political and economic move by the US administration following yesterday's attacks on cargo ships in the Strait of Hormuz, where the finger was pointed at Iran, which in turn denied the targeting.

Reuters quoted a US official as confirming that Washington had decided to revoke the general license that allowed the composition of the Iranian economy to sell and export oil abroad.

Energy market analysts pointed out that the revocation of this license represents a reactivation of Iran's policy of choking on supplies, which reduces the global supply of crude and pushes markets to price additional geopolitical risks, which is explained by the successive jumps in oil futures contracts over the past few hours.

Dollar gains

The spark of the military escalation has spread to the currency markets, with the US dollar holding on to gains at the start of Wednesday's trading supported by a growing appetite for safe-haven assets.

Global stock market reports monitored the stability of the dollar index against a basket of six major currencies at 101.18 points, recording its highest level since July 2.

On the other hand, the US dollar rose against the Japanese yen to 162.28 yen, while the euro and the pound fell against the greenback, the Australian dollar held steady while the New Zealand dollar made slight gains.

On the digital asset front, the cryptocurrency market recorded a mass decline, as a result of which Bitcoin and Ether fell by varying percentages.

Economic concern

These developments on the ground have brought the global inflation file back to the forefront of investors' and markets' attention.

Analysts at the Westpac banking group confirmed that recent attacks on commercial vessels in the Strait of Hormuz have undermined stability and revived concerns about the sustainability of agreements to end the war in the region.

Rising geopolitical risks and the threat to supply lines are paving the way for higher commodity prices, which was reflected immediately and quickly in rising bond yields globally, amid fears that central banks will have to revise their monetary policies, the experts told Reuters.