Global Energy Prices Surge Amid Iran Conflict, Prompting U.S. Treasury Sales

The ongoing conflict in Iran, now in its fifth week, has led to sustained high energy prices, prompting some countries to sell U.S. Treasury bonds to support their economies and currencies. According to Ming Pao, data from the Federal Reserve indicates that U.S. Treasury bonds held in custody by the New York Federal Reserve for foreign central banks, government agencies, and international institutions have decreased by $82 billion since February 25, before the outbreak of the Iran conflict. This reduction brings the total value down to $2.7 trillion, the lowest level since 2012. The recent attack on a Kuwaiti oil tanker near Dubai has further fueled the rise in energy prices. Brent crude oil prices surged past $118 per barrel last night, reaching their highest level since June 2022. Data from the London Stock Exchange Group (LSEG) shows that Brent crude oil futures for the near month are expected to rise by 60% in March, marking the largest monthly increase since records began in June 1988.