Singapore: Global financial markets came under pressure at the start of the week as rising tensions in the Middle East pushed oil prices higher and unsettled investors worldwide.
Oil prices surged after attacks linked to the Iran conflict disrupted shipping routes near the Strait of Hormuz, one of the world’s most important energy corridors. Brent crude climbed to around 77 to 82 dollars per barrel, while US crude moved above 71 dollars. Analysts warn prices could rise further if the situation worsens.
The Strait of Hormuz handles roughly one fifth of the world’s oil and liquefied natural gas shipments. Reports that many vessels are waiting outside the strait due to security risks have increased fears of supply shortages.
Stock markets in Asia and beyond reacted negatively as investors moved away from riskier assets. Japan’s Nikkei index fell by more than one percent, while markets in Hong Kong and India also declined. US stock futures pointed lower, reflecting global uncertainty.
Energy companies saw gains as oil prices climbed, but this was not enough to prevent broader market losses.
Investors shifted money into safer assets. Gold prices rose, the US dollar strengthened, and demand for government bonds increased as traders looked for stability.
Rising energy costs are expected to add to inflation pressures and could slow economic recovery. Higher shipping insurance costs and disrupted trade routes are already increasing global transport expenses. Several Asian countries are reviewing emergency oil reserves and alternative supply options.
OPEC and its allies have agreed to increase production slightly starting in April, but analysts say the additional supply may not offset potential losses if disruptions continue.
Market sentiment has also been weakened by concerns about inflation, interest rate decisions, and financial sector risks in parts of Europe.
Analysts say markets are likely to remain volatile in the coming weeks. Investors are closely watching developments in the Strait of Hormuz, global oil supply flows, and diplomatic efforts aimed at reducing tensions.