LONDON: Global financial markets turned volatile on Monday as oil prices jumped sharply and major stock indices in the US and Europe retreated, driven by renewed geopolitical tensions in the Middle East following Iran’s closure of the Strait of Hormuz.
Investor sentiment weakened ahead of the anticipated end of the US-Iran ceasefire, with uncertainty surrounding upcoming diplomatic talks. Washington has indicated plans to send a delegation to Pakistan for fresh negotiations, while Tehran has yet to confirm its participation.
Benchmark crude prices reacted strongly. Brent crude rose by $4.61, or 5.1%, reaching $94.99 per barrel, while West Texas Intermediate climbed $4.33, or 5.16%, to $88.18. The rebound follows a sharp decline of nearly 9% on Friday, when Iran had temporarily allowed commercial shipping through the vital waterway.
Market analysts attributed the surge to escalating risks of supply disruption. The Strait of Hormuz is a critical global energy corridor, handling roughly one-fifth of the world’s oil and liquefied natural gas shipments.
Renewed concerns over potential attacks on commercial vessels and the possibility of broader conflict between the US and Iran have heightened market uncertainty. Additionally, doubts persist over whether planned negotiations in Islamabad will proceed, particularly as Iran has signaled reluctance to engage while the blockade remains in effect.
Equity markets reflected the growing unease. On Wall Street, the S&P 500 fell 0.3%, the Nasdaq Composite declined 0.5%, and the Dow Jones Industrial Average edged down slightly.
European markets experienced steeper losses, with Frankfurt dropping 1.2%, Paris declining 1.1%, and London slipping 0.6%. The downturn contrasted with earlier gains across major Asian markets, including Tokyo, Hong Kong, and Shanghai, underscoring the uneven global response to escalating geopolitical risks.
By Agencies
