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Middle East Conflict Sparks Global Market Turmoil
9 Mar
Summary
- Oil prices jumped 30% last week, exceeding $90 a barrel.
- Tankers avoid the Strait of Hormuz, causing significant energy disruptions.
- Global markets experienced broad selling across assets last week.
Global markets are bracing for continued volatility as hostilities in the Middle East intensify, significantly stressing oil shipping and infrastructure. Brent crude prices climbed approximately 30% last week, surpassing $90 a barrel, marking its largest increase in six years. This surge is driven by widespread concerns over energy supply disruptions, with tankers continuing to avoid the critical Strait of Hormuz.
The conflict's expansion into its second week has seen the United Arab Emirates and Kuwait join Iraq in reducing oil production amid filling storage and disrupted shipping routes. Market reactions included broad selling across asset classes last week, with US bonds experiencing their most significant drop since 2025, and the S&P 500 suffering its largest weekly loss since October. Emerging-market equities also saw a substantial decline.
Investor sentiment has been impacted by growing signs of market angst, with volatility gauges rising. Some analysts predict further downside in stock markets until positive news emerges. However, others caution against excessive bearishness, noting the current administration's sensitivity to market swings and the potential for de-escalation or diplomatic solutions.
