The Globe and Mail reports in its Wednesday edition that relief from falling oil prices and easing inflation pressures following the U.S.-Iran ceasefire struck in April has evaporated. Guest columnist Jamie McGeever writes that now, Washington and Tehran are attacking each other with increasing ferocity, and the prospects of either side backing down seem limited, and escalation seems more likely than reconciliation. In some ways, the economic risk that poses even greater than what the world faced when the war started five months ago. Oil inventories are substantially lower now, and refining capacity is heavily constrained. Brent and U.S. crude futures have shot up around 30 per cent in the last few weeks, and worryingly for policy-makers as well as businesses and consumers, oil is now up 25 per cent year-on-year. A significant risk premium must be embedded into crude prices as long as Iran retains the ability to shut the Strait of Hormuz to tanker traffic. Average U.S. pump prices are back above $4 (U.S.) a gallon, a psychological threshold for gas-guzzling Americans, especially in the mid-summer "driving season." In light of all this, the prospect of a Federal Reserve interest rate cut this year has surely diminished.