Oil prices surged to $100 per barrel as a result of the ongoing U.S.-Israeli conflict with Iran, causing a global stock market decline on Thursday. The S&P 500 dropped 1.5%, while the Dow Jones Industrial Average and Nasdaq composite fell 1.5% and 1.7%, respectively.
The focal point of concern was the oil market, with the price of Brent crude hitting $101.59 per barrel. There are fears that the conflict may disrupt oil production and transportation in the Persian Gulf, leading to significant inflation worldwide.
Iran has intensified its attacks on oil facilities in Gulf Arab countries, obstructing cargo traffic through the critical Strait of Hormuz. In response, the International Energy Agency (IEA) decided to release 400 million barrels of emergency oil reserves, marking its largest release in history. The U.S. also planned to release 172 million barrels from its Strategic Petroleum Reserve to stabilize prices.
The G7 energy ministers met in Paris to address the escalating prices, but uncertainties persist, fueling speculation of further increases. Oxford Economics warned of continued volatility in oil prices, with the potential for prices to spike to $140 per barrel.
Since the conflict began on Feb. 28, oil price fluctuations have roiled global financial markets. The situation has raised concerns about prolonged Middle East production disruptions and the resulting economic inflation. In trading, European markets remained relatively stable, while Asian markets experienced declines. Currency markets also saw fluctuations, with the U.S. dollar weakening against the Japanese yen and euro.
