Oil Prices Surge Amid Middle East War As Global Stocks Retreat
Rising Tensions Push Oil Prices
CRUDE oil markets reacted sharply Friday to escalating hostilities in the Middle East. Brent crude jumped 8.5 percent to $92.69 per barrel, while WTI rose more than 12 percent to over $90, completing the largest weekly gain on record. The surge follows US President Donald Trump’s warning that only Iran’s “unconditional surrender” would end hostilities.
The conflict has disrupted shipping through the Strait of Hormuz, a vital channel for roughly 20 percent of global oil and liquefied natural gas, while attacks on oilfields in Iraq and precautionary production cuts in Kuwait add to supply concerns.
Inflation Fears Loom
The prospect of sustained high energy prices is raising alarms over inflation. Investors fear that prolonged disruptions could hit the global economy and limit central banks’ ability to stimulate growth. Kathleen Brooks of XTB noted that expectations of a short conflict are fading, driving oil prices upward. AJ Bell’s Russ Mould highlighted the risks: “The longer that energy infrastructure is affected, the greater the chance of a significant inflationary impact.”
US Economic Data Adds Pressure
Compounding market jitters, US labor data showed a loss of 92,000 jobs in February, alongside a slight rise in unemployment and a 0.2 percent drop in January retail sales. Analysts say the combination of slowing economic indicators and rising oil costs complicates predictions for Federal Reserve rate cuts, now expected in September rather than June.
Stock Market Reaction
Global equity markets reacted negatively. Wall Street’s leading indices fell over one percent, while European markets declined around the same margin. Investors weighed the dual pressures of geopolitical risk and economic slowdown, with energy prices now a major variable in forecasts for global growth.
