Global oil prices have surged past $115 and Asian markets have witnessed a sharp decline in stocks after the US-Israel war with Iran entered its fifth week.
Brent crude jumped over 3 percent to top %115 per barrel, positioning it for its largest monthly gain in history. Similarly US-traded oil rose 3.5 percent to reach $103.
The energy spike sent ripples through global markets, causing Asian stocks to tumble at the open, with apan’s Nikkei 225 down by 4.5 percent and the Kospi in South Korea 4 percent lower.
This market volatility follows a significant expansion of regional conflict. Over the weekend, Iran-backed Houthi rebels in Yemen launched strikes against Israel.
On Sunday, in an Interview with Financial Times, President Donald Trump said that “he could take the oil in Iran and potentially seize its major fuel hub of Kharg Island,” while adding that a peace deal could be reached “fairly quickly.”
Global energy markets are already on edge dealing with intense volatility following Tehran’s persistent blockade of Strait of Hormuz in retaliation for US and Israeli strikes.
With approximately 20% of the world’s oil and gas supply typically moving through this narrow passage, the current standstill has sent prices surging.
Andrew Lipow of Lipow Oil Associates predicts Brent crude could hit $130 a barrel in the near future.
“My greatest fear is that you have a general economic slowdown around the world… because consumers simply run out of money as they’re spending more on energy and, in addition, food,” he said.
Earlier this week, BlackRock CEO Larry Fink warned that the world could witness “global recession” if oil prices surge to $150 per barrel, driven by the persistent closure of the critical Strait of Hormuz and soaring tensions in the Middle East.
