Global oil prices are expected to spike sharply when markets open after escalating conflict in the Middle East and the reported closure of the strategic Strait of Hormuz sent shockwaves through financial systems worldwide.
Traders anticipate a significant jump in crude benchmarks amid fears that supply routes through the Gulf — which handle roughly a fifth of the world’s oil shipments — could face prolonged disruption. Analysts say even the perception of restricted traffic through the narrow waterway is enough to trigger aggressive buying and price volatility.
The escalation follows Iranian strikes linked to the widening regional confrontation, prompting concerns that energy infrastructure and shipping lanes may become direct targets. Shipping insurers have reportedly raised premiums, and several tanker operators are said to be reassessing routes through the area.
Stock markets across Asia, Europe and the United States are bracing for turbulence, with energy stocks likely to rise while broader indices may come under pressure. Economists warn that sustained high oil prices could fuel inflation, raise fuel costs for motorists and increase transportation expenses globally.
Major oil-producing nations have signalled readiness to stabilise supply if necessary, but market observers caution that logistical constraints limit how quickly additional output can offset disruptions in the Gulf.
The situation remains fluid, and investors are closely monitoring diplomatic developments that could determine whether the energy shock proves temporary or prolonged.
