U.S. Dollar Surges as Oil Nears $120 and Iran War Threatens Global Energy Supplies

The escalating U.S.-Israeli war on Iran has already suspended around one fifth of global crude and natural gas supplies as Tehran targets ships in the Strait of Hormuz and attacks energy infrastructure across the region. On Monday, the U.S. dollar surged as soaring oil prices, which spiked to just under $120 per barrel, drove investors toward cash. The euro fell 0.6% to $1.1548, hitting a 3.5-month low, while sterling dropped 0.7% to $1.3333. The dollar rose 0.4% to 158.47 against the yen and gained 0.26% against the South Korean won to 1,485.50. Qatar's energy minister warned that all Gulf energy producers could halt exports within weeks, potentially driving oil to $150 a barrel. Traders are now pricing in less than 40 basis points of U.S. rate cuts by year-end, as rising energy costs threaten to stoke inflation globally.