Brent Crude Nears $120, Crypto Market Under Pressure

Brent crude oil prices surged to $119.50 a barrel on Monday, the highest level since the Russia-Ukraine conflict in 2022. This surge stems from near-halted shipping in the Strait of Hormuz. Amidst potential military action against Iran by the US and Israel, the Iranian Revolutionary Guard has threatened to strike ships attempting to pass through the strait, paralyzing approximately 20% of global seaborne crude oil transport.

Since the US-Israeli airstrikes began on February 28, crude oil prices have risen by over 50%. Although the Financial Times reported that G7 finance ministers are discussing using strategic oil reserves to ease supply pressures, the French Finance Minister subsequently clarified that no decision has been reached, causing oil prices to fall from their peak to around $103.

The market's focus is now shifting to the upcoming release of the February US Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) data. If inflation data exceeds expectations, coupled with upward pressure on energy costs, the Federal Reserve may postpone its interest rate cut plans, which would continue to suppress risk assets such as cryptocurrencies. Macquarie strategist Vikas Dwivedi pointed out that if the Strait blockade lasts for several weeks, Brent crude oil could break through $150, further exacerbating global inflation expectations. US Energy Secretary Chris Wright stated on Sunday that tanker traffic will only resume when Iran can no longer threaten shipping safety, but did not provide a specific timeline. The market is currently in a highly sensitive state, with the interplay of geopolitical risks and monetary policy profoundly affecting asset prices.