Oil Prices Surge Over 4% After Fresh US-Iran Escalation

LONDON: (News Desk) – Global oil prices jumped more than four percent on Monday following renewed military tensions between the United States and Iran, raising fears of disruptions to energy supplies through the Strait of Hormuz and triggering concerns over global inflation.

The latest escalation came after fresh US strikes and an Iranian attack on a commercial vessel in the strategically important waterway. Iran’s Revolutionary Guards warned that the Strait of Hormuz would remain closed until what it described as the end of American intervention in the region, while the US Central Command insisted the route remained open for lawful maritime traffic.

Brent crude rose 4.2 percent to $79.21 per barrel, while West Texas Intermediate (WTI) climbed 4.3 percent to $74.49 per barrel in early trading.

Analysts said the renewed conflict has increased the geopolitical risk premium in oil markets, although they believe prices are unlikely to revisit the extreme highs seen during the initial outbreak of the conflict earlier this year due to ample global supplies and relatively weak demand.

The spike in crude prices also weighed on global stock markets. South Korea’s Kospi index plunged five percent, led by heavy losses in technology shares, while Japan’s Nikkei also declined. However, Hong Kong’s Hang Seng Index posted modest gains.

The stronger oil prices boosted demand for the US dollar, with investors increasingly expecting the US Federal Reserve to keep interest rates higher for longer if energy-driven inflation persists.

Market participants are now closely watching upcoming corporate earnings, including results from major technology companies and leading US banks, for further signals on the global economic outlook.