Oil prices have climbed sharply, with Brent crude rising above $116 a barrel, its highest level in nearly two weeks, as the conflict in the Middle East intensifies.
Prices jumped more than 3% on Monday, putting oil on track for what could be its largest monthly gain on record, driven by fears of supply disruption and a widening regional conflict.
The escalation has been fuelled by the involvement of Iran-backed groups and growing speculation over potential US military action. Donald Trump added to market uncertainty, suggesting the US could target key Iranian oil infrastructure, including Kharg Island, a critical export hub.
At the same time, Trump indicated that Iran had allowed oil tankers to pass through the Strait of Hormuz, hinting that a diplomatic resolution may still be possible.
Despite these mixed signals, investors are increasingly preparing for a prolonged conflict, raising concerns about:
- Higher global inflation
- Energy supply disruption
- Slower economic growth, particularly in Asia
Asian equity markets reacted sharply, with major indices in Japan and South Korea falling around 3%, reflecting the growing risk-off sentiment.
