Oil prices surged back to $100 per barrel on Thursday as the U.S.-Israeli conflict with Iran showed no signs of abating, leading to a global stock market downturn. The S&P 500 dropped 1.5%, while the Dow Jones Industrial Average plummeted by 739 points, and the Nasdaq composite fell 1.7%.
The focal point remained the oil market, where Brent crude prices hit $101.59 per barrel overnight. Concerns persisted that the ongoing war could disrupt oil production and transportation in the Persian Gulf, potentially triggering significant inflation worldwide.
Iran intensified its attacks on oil facilities in Gulf Arab countries, causing disruptions in cargo traffic through the crucial Strait of Hormuz. In response, the International Energy Agency (IEA) announced its plan to release a record-breaking 400 million barrels of emergency oil reserves to stabilize energy markets.
The U.S. also committed to releasing 172 million barrels from its Strategic Petroleum Reserve next week to counter soaring oil prices. The IEA’s decision followed a meeting of energy ministers from the Group of Seven countries in Paris to explore strategies to mitigate price hikes.
Market volatility persisted amid uncertainty, with fears that oil prices could climb even higher. Oxford Economics warned that without a de-escalation timeline for the conflict and the reopening of the Strait of Hormuz, prices could spike to $140 per barrel.
Since the conflict began on Feb. 28, oil price fluctuations have triggered market swings globally, underscoring the economic repercussions of the ongoing tensions. The possibility of prolonged disruptions in Middle Eastern oil production has raised concerns about inflationary pressures on the global economy.
In European markets, Germany’s DAX and Britain’s FTSE 100 held steady, while Paris’ CAC 40 slipped 0.4%. Asian markets also experienced declines, with Tokyo’s Nikkei 225 falling by 1%, the Kospi in South Korea dropping 0.5%, and Hong Kong’s Hang Seng losing 0.7%.
Currency trading saw the U.S. dollar weakening against the Japanese yen and the euro. The dollar dipped to 158.62 yen, while the euro edged down to $1.1563.
