Oil Prices Break $100 a Barrel, Global Markets Tumble Amid Middle East Conflict

Energy markets under extreme pressure

On the tenth day of the Middle‑East war, oil prices exploded to historic levels, cleanly breaking the $100‑per‑barrel barrier on Monday. At 08:25 GMT, North Sea Brent was up 16.18% at $107.69, after briefly spiking more than 28% early in the session. U.S. West Texas Intermediate (WTI) surged 14.02% to $103.64, following a peak of over 31% in the opening minutes. The jump dwarfs even the 2022 Ukraine‑Russia conflict, when Brent touched $130.50 in early March.

Strait of Hormuz – the focal point of anxiety

European gas prices followed suit. The Dutch TTF gas hub jumped nearly 30% at the opening, ending the session up 13.49% at €60.58 per MWh. The rally reflects growing worries over global energy supplies after fresh strikes hit key oil‑and‑gas facilities throughout the Gulf over the weekend.

The Strait of Hormuz – through which roughly 20% of world oil and a sizable share of LNG flow – appears effectively paralysed, feeding fears of sustained supply bottlenecks.

Escalating military actions and a possible protracted war

Monday saw Iran fire its first salvo of missiles and drones toward Israel and several Gulf states, just days after the appointment of Mojtaba Khamenei as the new Supreme Leader following the death of his father, Ali Khamenei, on the first day of the conflict. Analysts interpret the succession as a signal that Tehran will not back down from the United States and its allies, raising the prospect of a longer‑lasting confrontation in a region that holds a large share of the world’s hydrocarbon reserves.

G7 deliberations on strategic reserves

Faced with the risk of a lasting disruption, major economies are already weighing emergency steps. The G7 finance ministers, meeting virtually on Monday, are expected to discuss tapping strategic oil reserves. International media cite estimates that a coordinated release of 300‑400 million barrels – roughly 25‑30% of the developed‑world strategic stockpile of about 1.2 billion barrels – could offset the loss of flow through Hormuz, which normally carries 17‑20 million barrels per day. Such a release would cover two to three weeks of normal traffic.

This prospect helped temper the price surge late in the Asian session, keeping both benchmarks just above the $100 mark.

Equity markets under pressure

European bourses opened sharply lower:

• Paris – ‑2.54%
• Frankfurt – ‑2.40%
• Milan – ‑2.19%
• London – ‑1.65% (the London market held up slightly better thanks to oil majors gaining on higher crude prices)

In Asia the sell‑off was even steeper. Tokyo’s Nikkei fell ‑5.19% and Seoul’s Kospi dropped ‑5.96%. The region is especially vulnerable because South Korea and Japan are among the world’s largest oil importers and their high‑tech industries are energy intensive.

Renewed inflation worries

Beyond the immediate market reaction, investors fear a new global inflationary cycle. Higher oil prices quickly translate into higher fuel costs, transport charges, and energy bills for companies. Sovereign bond yields reflected this anxiety:

• French 10‑year yield: 3.60% (up from 3.51% on Friday)
• British 10‑year yield: 4.76% (up from 4.63%)
• Italian 10‑year yield: 3.73% (up from 3.62%)

The moves signal expectations of more persistent inflation, which could keep central banks in a restrictive policy stance for longer.