Oil prices jumped and global markets fell after U.S. President Donald Trump said the United States might seize Iran’s oil, raising fears of a wider Middle East conflict.
Markets React to Oil Shock
However, Brent crude, the global oil benchmark, climbed to about $116 per barrel in early Monday trading. The price rose by roughly 2% after Trump made the comment during a weekend interview.
Furthermore, Asian markets reacted quickly. Japan’s Nikkei dropped about 3%, South Korea’s Kospi fell 3.4%, and Hong Kong’s Hang Seng also declined.
Meanwhile, European markets opened slightly lower. The UK’s FTSE 100 managed small gains, supported by mining stocks.
Rising Tensions Push Energy Prices Higher
Consequently, energy prices increased as traders feared supply cuts from the Gulf. European natural gas prices also rose due to uncertainty around global supply.
Furthermore, tensions grew after the U.S. deployed more troops to the region. Reports also showed Yemen’s Houthi rebels launched ballistic missiles toward Israeli targets.
In response, analysts warned that the crisis could push oil prices much higher. Some projections say crude could rise to $150 per barrel, and in extreme cases, even $200.
Risk to Global Economy
Meanwhile, Brent crude is heading for its biggest monthly gain on record. This reflects fears that key routes like the Strait of Hormuz may face disruption.
Consequently, higher oil prices could reduce global demand and slow economic growth. Governments and energy leaders have started emergency talks to manage possible fuel shortages and rising costs.
