Oil futures are trading above $83 per barrel on Israel's looming invasion of Lebanon. If the oil price sits above $90 for an extended period of time, more than a month. Stagflation will be locked into the global economy. A wider conflict in the middle east would be Iran and the U.S. directly in combat

(Chart 1)

(Chart 2)

The oil price spiked over 2% on mostly geopolitical issues, namely the looming invasion of Lebanon by Israel, which has been pencilled in for July 2024.  With Israel aiming to create a buffer zone from their Northern border with Lebanon, that will be seen as a land grab, thus Hezbollah will unleash its extensive missile arrys aimed at Israeli cities.  If America joins in, with limited aerial attacks on Hezbollah positions, Iran may block shipping on the Suez canal, and also attack Israel again, as they did in April this year, with drones and missiles.   This could lead to a direct confrontation with Iran and the U.S., and Iran is an ally of Russia, which has been threatening NATO in Ukraine.   If an all-out-war occurs in the Middle East, the oil price will stay bid over $100, surpassing its 2022 high of $108 in May 2022 of that year, during Russia's initial invasion of Ukraine.

I would argue that we have been amidst stagflation lite since the inflation spikes of 2022, mainly lead by higher oil prices before the Strategic Petroleum Releases occurred throughout 2022 and 2023, and the Russian 'oil cap'.  However, inflation had already been embedded into the global economy due to relatively low rates rises, and/or expectations of rate cuts after inflation has seemingly fallen, which has been very much a bizarre sentiment by Wall Street, that inflation is indeed declining into deflation, which it is not.  Thus, is the expectation of cheap money dependency, that has been the norm of the last two decades.  While the oil price has not dramatically fallen at all, trading within its 2 year average range of $75 and $80.

The current oil price is bid over $80, trading at $83 per barrel, closing in on its April 12th 2024 high of $87 when Iran attacked Israel with drones and missiles.

Prudency for full blown stagflation and an Energy Crisis part Two (1973 redux) is in the works, yes, history has a rhyme. If the oil price stays elevated above $90 for more than a month, stagflation will most certainly be locked in place.

Please refer to Chart 1.  Current oil price, with price notes.  And Chart 2, which shows the spike in the oil price (April 2024) after Iran and Israel attacked each other with missiles/drones.