Crude oil prices rose more than 4% Monday as Iran launched multiple missile attacks against Israel. Escalating tensions spark worries of war in West Asia and again raise concerns about the world energy supply. A strong rise in oil costs was noted even as equity markets were shaky and interest rates uncertain. Brent crude topped out near $97 a barrel and WTI crude at about $94 a barrel. Most of last week’s losses were recovered.
Sunday’s fighting erupted with missiles landing in northern Israel. Tehran said the strikes were payback for Israeli operations in southern Beirut. Tensions and concern have grown over the fragile peace between the two countries, which has held since April.
The energy market moved quickly; Brent rose 4.26% during the session, marking its largest daily increase since May. WTI crude also rose more than 4%. Traders responded not just to fear of a large military conflict but also to worries about threats to shipping through the Strait of Hormuz, the key oil passage for the world.
Nearly 1/5th of global oil use goes through the Strait of Hormuz; any disruption to oil tanker movements could result in ripple effects on the energy market as traders account for a geopolitical risk premium for crude.
Indian stock market opened mixed on Monday
Indian shares slumped as uncertainties about developments in West Asia continue and the spike in oil prices worried investors. The BSE Sensex tanked over 820 points, and it is trading at 73,421, while the Nifty 50 fell about 290 points and is trading at 23,080. Investors remained watchful because continued high oil prices will lead to inflation and increase the import bill of India.
Strategic importance of the Strait of Hormuz
The Strait of Hormuz is a vital artery and a strategic choke point for global energy. The Strait is a key transit route for most of the oil exports from Saudi Arabia, the UAE, Iraq and other Gulf producers. Oil supplies are still flowing, but fears persist of threats to shipping if the conflict drags on. Such fears alone have propelled crude prices higher. The current rally has now erased last week’s decline, driven by the failure of diplomatic engagement to ease supply concerns.
Asian share markets tumble
Asian markets plunged on Thursday, with heavy, broad-based losses driven by sharply rising oil prices and geopolitical uncertainty. The KOSPI index for South Korea was down nearly 6% by mid-session in Seoul after falling about that amount in early trading. Japan’s Nikkei 225 fell nearly 4% as investors pulled out of export-heavy technology stocks. The decline followed last week’s sell-off on Wall Street.
Wall Street sees $2 trillion wipeout
US stocks had their worst trading day since January on Friday. Robust jobs data confirmed expectations that the Federal Reserve will keep interest rates higher for longer. The Dow Jones Industrial Average fell 1.35%, the Standard & Poor’s 500-stock index dropped 2.64% and the Nasdaq Composite index tumbled 4.18%. The total market value lost nearly $2 trillion. The outlook for persistent inflation also further unnerved investors. There was a flight of capital out of safe-haven assets.
Trump calls for restraint
Axios reported that Trump said he would call Israeli Prime Minister Benjamin Netanyahu himself and tell him to de-escalate after Iran launched missiles at Israel on Sunday. The attack was the first such exchange between the two countries since a ceasefire came into effect in April, raising fresh concerns about stability in the region. A wider conflict could threaten wider regional agreements. At this stage, investors are watching the development in West Asia and its impact on the global energy and financial markets.
Why higher oil prices matters for India
India is an oil importer, and the volatile global oil price is having a significant impact on the Indian economy. Elevated oil prices translate into a higher import bill, a current account deficit and higher inflation. It will further reduce the scope of the Reserve Bank of India for rate cuts and also affect corporate profits. Brent crude is near $97 a barrel, and with tensions not abating, investors are watching the region for clues to India’s inflation and currency.
What investors should watch
The critical question is whether this conflict remains localised or escalates into a broader regional conflict. If the oil price continues to climb, the central banks will remain singularly focused on inflation, and the whole of the financial markets will be under tremendous stress. Any disruption to oil transit could send prices to unprecedented levels. Crude oil is once again a key barometer for global investors.
Also Read: Israel Strikes Iran After Missile Attack From Tehran: Has Middle East War Restarted?
Priyanka Roshan is a business writer and assistant editor at the NewsX website who tracks everything from stock market swings and corporate earnings to personal finance trends and policy shifts. Known for turning fast-moving business developments into sharp, reader-friendly stories, she combines speed, accuracy, and a data-driven approach to break down complex financial news for everyday audiences.
With over 9.5 years of newsroom experience, Priyanka has worked with leading media organisations, including Moneycontrol, Times Now, and Ping Digital, covering diverse beats such as business, politics, technology, auto, travel, sports, and the world. From live breaking news desks to SEO-led digital storytelling, she specialises in creating engaging content that keeps readers informed without overwhelming them.
