Oil Prices Surge 7% After Israeli Strikes on Iran

Oil prices surged following Israeli strikes on Iran, triggering a wave of panic across global markets. The Brent crude oil index climbed by more than 7%, reaching $74.40 per barrel, while the WTI index followed with a 7.72% increase, hitting $73.29 per barrel. This surge in oil prices was the most significant since 2022, indicating the seriousness with which oil markets are taking the geopolitical tensions.

The impact of the strikes was not limited to the oil market. Stock markets around the world experienced significant volatility. In London, the FTSE 100 index opened down by 0.6%, while Asian markets saw a steep decline. In contrast, Russian energy stocks rose, benefiting from the increased demand for oil. Safe-haven assets such as gold also gained ground, with gold prices reaching $3,423.30 an ounce, the highest level in two months.

The Strait of Hormuz, a critical maritime corridor through which nearly 20% of the world’s oil passes, became a strategic hotspot. The global economy, already recovering from an inflationary cycle, faces the risk of a "stagflation shock" with slowed growth and reignited inflation. Analysts are revising their forecasts, drawing parallels to past crises such as the 1979 oil explosion and the 2022 war in Ukraine, which had significant impacts on the European economy.

Geopolitical tensions escalated as world leaders responded to the strikes. Donald Trump called for Iran to make a deal, while Vladimir Putin condemned the Israeli attack, describing it as an "unacceptable escalation." Russia, a major oil exporter, stands to benefit from rising oil prices, making it a potential beneficiary of the conflict. China remained silent but vigilant, while Europe was divided in its response, with some calling for calm and others strengthening their support for Israel.

The global economy is now in a delicate balancing act, with every diplomatic misstep having direct consequences on the stock market. The situation remains tense, with Iran retaliating by sending 100 drones towards Israel, indicating that negotiations may not be a priority. The crypto market, which had been targeting $110,000, also felt the impact, with its run abruptly halted by the escalating tensions.