Oil is the problem that just won't go away for markets. With international crude nearing $100 a barrel again, central banks have to grapple with energy prices contributing to inflation even when they'd prefer to treat it as a temporary shock.

The seeming normalization of oil prices in midsummer now looks like a fleeting phenomenon. In early trading, Brent crude, the global oil benchmark, rose 2.2% to $99.14 a barrel-its highest level since July. West Texas Intermediate, the U.S. benchmark climbed 3.3% to $94.48 a barrel.

Months after the U.S. administration had suggested it would be able to fully reopen the Strait of Hormuz, traffic is limited. UBS analysts estimate crude oil and product flows via the crucial waterway stand at seven million barrels a day, from more than 20 million daily before the conflict. Missile strikes on a Saudi Aramco refinery Monday by Iran-backed Houthi rebels were a reminder of Tehran's ability to create disruption in the Middle East.

"Oil prices will drop precipitously, like everything else is dropping (but more!), when we WIN the war with Iran," President Donald Trump posted on Truth Social early Tuesday. But markets aren't pricing in an imminent end to the U.S.-Iran conflict, which has dragged on since late February. Peace talks have stalled and although the Iranian regime is weakened, it doesn't appear to be close to collapse.

If politicians can't solve the issue, central bankers have to grapple with the consequences. Although monetary policymakers are wary of reacting too strongly to rising energy prices, they are having to make concessions. The European Central Bank is expected to raise its key interest rate Thursday for the second time since the start of the war between the U.S. and Iran. Traders are betting the Federal Reserve could follow suit next week.

So far, U.S. stock markets have managed to largely shrug off rising oil prices. But if energy-driven inflation forces interest rates higher, things could get messy.