Middle East conflict adds to central bank headaches as oil price rise extends for 4 days
The escalating conflict in the Middle East is posing a new challenge for the world’s central banks, as concerns about oil shocks and new inflation risks complicate policymakers’ calculations to boost growth.
Brent crude oil prices rose for a fourth day, rising 1.6% to $82.76 per barrel on Wednesday, hovering near their highest since January 2025. West Texas Intermediate Crude oil prices also rose for the third day in a row to $75.48.
Nomura’s economist team said, “The ongoing conflict in Iran has solidified the basis for many central banks to keep interest rates unchanged for the time being.”
Brent crude oil is up 36% so far this year, and WTI futures were up 32% as of Wednesday, according to LSEG data.
WTI crude oil (April 2026)
First tanker heads for Europe, makes U-turn to Asia as natural gas prices soar
Data from analytics firm Kpler shows that LNG tankers bound for Europe have reversed course and are now headed for Asia as a result of soaring global natural gas prices. The company said this is the first time a ship has been diverted from Europe to Asia during the current price hike.
Natural gas prices in Europe soared 66% this week after Qatar halted liquefied natural gas production in the wake of an Iranian attack. The country supplies about 20% of the world’s LNG and is the second-largest exporter after the United States.
Kupler said the tanker BW Brussels highlights the widening price gap between regions as Asian buyers “compete more aggressively for supply.”
“As the Asian market is highly exposed to Qatari volumes and with prices surging in both Asia and Europe, further diversion of unconsigned cargo is expected,” the company added. If buyers bid higher to keep shipments going, it could put upward pressure on European rights transfer facilities.
More than half of Europe’s LNG imports come from the United States, while South Asia is particularly dependent on LNG from Qatar and the United Arab Emirates. The only LNG export route from both countries is the Strait of Hormuz.
According to Kpler, in 2025, Pakistan will source 99% of its LNG imports from Qatar and the UAE, with Bangladesh and India procuring 59% each.
— Pippa Stevens
Ayatollah Khamenei’s son appears to be the frontrunner to become Iran’s new supreme leader: New York Times
Iran’s senior clerics, who are in charge of choosing the next supreme leader, are considering naming Mojtaba Khamenei, son of the late Ayatollah Ali Khamenei, to the top post, The New York Times reported on Tuesday.
The newspaper, citing three Iranian officials familiar with the talks, said the clerics could announce a decision as early as Wednesday morning, but some clerics have expressed concerns that the United States and Israel will target him.
— Anique Bao
White House to meet with defense contractors as US arms supplies tighten due to Iran attack – Reuters
Executives from U.S. defense contractors are scheduled to meet with officials at the White House on Friday to discuss accelerating weapons production after recent military operations, Reuters reported, citing sources familiar with the matter.
Representatives from major contractors including Lockheed Martin and Raytheon’s parent company RTX were invited to attend the meeting, Reuters reported.
Meanwhile, the Pentagon is preparing a supplemental budget request of about $50 billion to replenish weapons used in recent conflicts, including operations in the Middle East. The proposal, which could be announced as early as Friday, is still preliminary and subject to change, Reuters reported, citing people familiar with the matter.
The meeting came as US President Donald Trump said on Tuesday that US ammunition stockpiles are substantial, adding that the US has a “virtually unlimited supply” of “intermediate and above-intermediate” weapons. It was not immediately clear what grade of weapons Trump was referring to.
— Li Yingshan
US diplomatic outposts face attacks across the Gulf
Several US diplomatic missions in the Gulf have come under attack in recent days, according to State Department cables confirmed by sources and shared with MS NOW.
Dubai authorities said on Tuesday that a drone-related incident caused a fire near the US Consulate General in Dubai, but the fire was quickly extinguished. No injuries were reported.
A drone struck the U.S. embassy compound in Kuwait, but all staff members were safe, the Telegram said on Tuesday. The State Department has authorized the departure of more than 200 employees and family members following attacks by Iran and Iranian-backed groups targeting the embassy.
In Saudi Arabia, the U.S. embassy in Riyadh suffered significant damage in a drone attack on Monday, cutting off communications services. No injuries were reported as the embassy had already been evacuated.
The State Department and the affected embassies have not yet publicly commented on the incident.
— Li Yingshan
US says it has destroyed 17 Iranian warships, ‘significantly weakening’ Tehran’s air defenses
US Central Command announced that it had destroyed 17 Iranian warships and approximately 2,000 targets, dealing a severe blow to Iran’s defenses.
“We significantly degraded Iran’s air defenses and destroyed hundreds of Iranian ballistic missiles, launchers and drones,” the senior US admiral said in a video posted on X.
— Li Yingshan
