Oil prices jumped and global stocks fell on Monday as investors reacted to a deepening Middle East conflict, with fears mounting that the war could widen and disrupt critical energy routes.
Crude prices climbed more than three percent at one point, with Brent nearing $117 a barrel, as the entry of Yemen’s Houthi rebels into the conflict heightened concerns about regional spillover.
The group said it launched missiles and drones at targets in Israel, raising alarms about the security of key shipping lanes in the Red Sea.
Brent crude is on course for a 60 percent gain in March that would outpace the monthly jump that followed Iraq's invasion of Kuwait in 1990.
Energy routes under threat
The risk of disruption has intensified around the Strait of Hormuz—a vital artery for global oil flows—and the Bab al-Mandeb, which carries a significant share of global trade.
Saudi Arabia has already rerouted some oil shipments to avoid the Hormuz chokepoint, where tensions with Iran remain high.
Markets rattled by escalation fears
Further remarks by US President Donald Trump further shook investor sentiment, who said Washington had multiple options regarding Iran’s oil infrastructure, including the strategic Kharg Island.
His comments added to speculation that the US could expand its role in the conflict, potentially including ground operations.
Meanwhile, Iranian officials warned of possible US military escalation, even as Pakistan offered to mediate between Washington and Tehran.
Global markets under pressure
Equity markets across Asia and Europe fell sharply, tracking losses on Wall Street after strikes on Iranian nuclear sites.
Analysts warned that rising oil prices could fuel inflation, disrupt supply chains and weigh on corporate earnings.
“The market is now reacting to higher crude pricing and the economic fallout,” said Pepperstone analyst Chris Weston, pointing to growing concerns over supply disruptions and shipping risks.
With tensions rising and key trade routes under threat, investors are bracing for prolonged volatility and wider economic consequences.
