The conflict in the Middle East is starting to cause major shocks in the energy and financial markets. The price of oil has recorded the largest single-day increase in the past six years, while Asian stock markets have fallen amid fears that blockades in the Strait of Hormuz could seriously disrupt global energy supplies.
The conflict between Iran and the United States, coupled with attacks on commercial ships in the Persian Gulf, has already led oil carriers to avoid the strategic route through the Strait of Hormuz, through which approximately a fifth of global oil and liquefied natural gas flows pass.
Oil jumps above $100
The price of Brent crude oil has surged by about 17% in a single day, reaching $108 per barrel – the largest daily increase in the past six years, according to data cited by Sky News. Subsequently, Brent crude oil futures contracts hit a high of $119.50 per barrel, while West Texas Intermediate (WTI) crude oil futures rose to $119.48 per barrel.
"The situation seems to be deteriorating even further," analysts at ING stated in a note.
The jump follows an almost 28% increase in the past week, fueling concerns about a new global energy crisis and a possible acceleration of inflation. Analysts warn that if tensions persist and oil traffic remains blocked in the Persian Gulf, prices could rise to $120 per barrel in the near future.
The rise in oil prices is already starting to be reflected in other markets. Edible oil prices have increased due to widespread use of vegetable oils in biofuel production. In agricultural markets, Malaysian palm oil has risen by 9%, and soybean oil traded in Chicago has reached its highest level since the end of 2022.
Grains have also become more expensive: wheat has reached its highest level since June 2024, and corn has reached the highest level in the past ten months.
In the metals market, aluminum has strengthened due to supply concerns, even though other metals have been affected by the appreciation of the dollar.
"The violent reaction stems from the fact that markets see no clear way out of the conflict in the Middle East, which is escalating and has now reached a high-stakes impasse where neither party seems willing to back down first," said Tony Sycamore, a market analyst at IG.
Asian markets fall, dollar strengthens
Geopolitical tensions have caused turbulence in the financial markets. Asian stock markets opened lower amid fears of the conflict's impact on the global economy.
The KOSPI index in South Korea triggered an automatic trading halt mechanism after an 8% plunge, with trading suspended for 20 minutes.
Meanwhile, the dollar remained close to the three-month high reached last week, making gold more expensive for investors using other currencies.
Gold has fallen by over 2%, due to the dollar's appreciation and fears that higher energy prices will fuel inflation and reduce the chances of a rapid interest rate cut.
Strait of Hormuz, the critical point of the energy crisis
At the center of this energy crisis is the Strait of Hormuz, one of the world's most important maritime routes for oil transportation, where attacks and the risk of military escalation have already begun to affect exports from the region.
Approximately 20% of global oil and gas supplies pass through this narrow strait between Iran and Oman. Normally, about 100 oil tankers and cargo ships transit the area daily.
Currently, however, many ships are avoiding the route due to the risk of missile or drone attacks.
U.S. Energy Secretary Chris Wright stated that energy prices will start to decline once the United States eliminates Iran's capacity to threaten commercial ships in the region.
"The plan is for oil, natural gas, fertilizers, and all products from the Gulf to flow through the straits again in the near future," the official said in an interview with Fox News.
According to him, the U.S. military is "significantly reducing" Iran's ability to strike commercial ships with missiles and drones, and disruptions could last only a few weeks.
Trump: "It's a very small price to pay"
The rapid increase in oil prices has been downplayed by U.S. President Donald Trump, currently in his second term at the White House.
In a message posted on the Truth Social network, Trump stated that the rise in oil prices represents "a very small price to pay for the security and peace of the United States and the world."
"Only fools think otherwise!" wrote the American leader, adding that prices will drop rapidly after the "Iranian nuclear threat is eliminated."
The Energy Secretary also conveyed a similar message, stating that temporary market disruptions are "a small price to pay" for the long-term stabilization of global energy supplies.
Japan prepares to release strategic reserves
The energy crisis is already prompting urgent responses from countries highly dependent on imports from the Middle East.
The Japanese government has called for the preparation of a potential release of oil from strategic reserves after reduced deliveries from the region, according to information obtained by Reuters.
Japan relies on the Middle East for about 95% of its oil imports, with around 70% of these deliveries passing through the Strait of Hormuz.
However, the country has strategic reserves equivalent to about 254 days of consumption, one of the largest storage capacities in the world.
Authorities in Tokyo state they are closely monitoring the situation and could coordinate potential oil releases with the International Energy Agency, as was done after Russia's invasion of Ukraine.
Iraq's oil production collapses
The conflict is already directly affecting oil production and exports from the region.
In Iraq, production from the main oil fields in the south of the country has dropped by about 70%, reaching just 1.3 million barrels per day, according to industry sources cited by Reuters. Before the conflict erupted, production was around 4.3 million barrels per day.
Exports have also plummeted, to about 800,000 barrels per day, as tankers can no longer freely navigate to the terminals in the south of the country.
An official from the Ministry of Oil in Baghdad described the situation as "the most serious operational threat" to Iraq's oil industry in over 20 years.
Iraq's economy is almost entirely dependent on oil, which generates over 90% of the state's revenues, making the current disruptions a major risk to the country's financial stability.
A global energy crisis is taking shape
The combination of rising prices, logistical blockades, and declining production in the Middle East is beginning to outline a possible new global energy crisis.
If oil traffic through the Strait of Hormuz is not resumed quickly, the effects could be felt in a chain reaction: higher fuel costs, increased inflation, and additional pressures on economies already affected by geopolitical instability.
For now, markets are betting that the situation will remain volatile, and the price of oil will continue to react to every military development in the region.