Global oil prices surged to $106.03 per barrel on Wednesday as fresh attacks on tankers in the Strait of Hormuz and Saudi Arabian energy infrastructure disrupted Gulf exports, tightening supply. The International Energy Agency warned that diesel shortages in Europe could persist into 2027 due to export disruptions and sustained high prices, with global production lagging behind demand .
In the U.S., the Consumer Price Index rose 0.6% in September from August, with gasoline prices jumping 9% and accounting for over half the monthly increase. The annual inflation rate reached 3.7%, up from 3.4% the prior month, as energy costs climbed 20% year-over-year . Core prices, excluding food and energy, advanced 0.3% for the second consecutive month, with shelter costs and airfares also rising.
The inflation surge has revived bets on a Federal Reserve interest rate hike later this month. Traders now see a 47% chance of a quarter-point increase at the Oct. 27–28 policy meeting, up from 22.1% the prior day, according to CME FedWatch . Cleveland Fed President Beth Hammack warned Monday that inflation pressures were "relatively broad-based," citing tariffs, AI investment, and rising services prices as additional drivers .
In Europe, the EU has spent an additional €110 billion on oil and gas since the Iran war began, according to Energy Commissioner Dan Jørgensen, who urged a shift away from fossil fuels . Polish energy firm Orlen warned that household gas tariffs may rise in 2027 if market prices remain elevated, with natural gas costs in Europe up 137% year-over-year .
