International oil prices surged at the beginning of the week.
Brent surpassed the $115/barrel threshold, rising by over 3%, according to BBC News. American oil crossed $103, while the global benchmark price is set to record the highest monthly increase in history.
The spike comes amid the escalating conflict in the Middle East.
Asian stock markets plummet, investors flee from risk
Financial markets reacted immediately. Japan's stock exchange (Nikkei 225) dropped by around 4.5%, and South Korea's Kospi index lost about 4%. In Hong Kong, the Hang Seng fell by over 1.5%.
Investors are increasingly worried that the war, now in its fifth week, will impact the global economy, particularly through energy price hikes and additional pressure on inflation.
Strait of Hormuz, the blockade shaking the global market
One of the key factors of the crisis is the partial blockage of the Strait of Hormuz, through which approximately 20% of the world's oil and gas normally transit.
Following Iran's reprisals to US and Israel attacks, the energy transport through this vital corridor has been nearly halted, leading to accelerated price increases.
According to experts, including those cited by the International Energy Agency, the situation could represent "the biggest oil shock in history."
Additional risks
The situation could worsen further. Houthi rebel attacks raise the risk of blocking another critical route - the Bab al-Mandeb strait, through which around 10% of global oil passes.
Such a scenario would put major pressure on supply chains and amplify economic turbulence, energy analysts warn.
Oil has risen by over 50%
Since the beginning of the war, the price of Brent oil has increased by over 50%, writes CNN. If at the end of February it was around $72/barrel, it reached nearly $120 in mid-March and continues to rise.
Analysts warn that, without a rapid de-escalation, price hikes could persist, with direct effects on fuel, transportation, and consumer goods prices globally.