BEIJING, March 9 (Xinhua) -- The strikes launched by the United States and Israel against Iran have triggered a sharp spike in global oil prices, thereby sending shockwaves across the share market and adding to global economic instability.
U.S. crude oil prices surged rapidly over the 100-U.S.-dollar threshold in the wake of rounds of strikes, hitting their highest point since the onset of the Ukraine crisis in 2022. The price for Brent crude was trading at 114.78 dollars a barrel and U.S. benchmark crude shot to nearly 114.00 dollars. Both were more than 20 percent above their closing prices on Friday.
The latest price hikes cap a volatile week that saw U.S. crude soar by 36 percent and Brent climb 28 percent. Markets are reacting to intensifying concerns that ongoing U.S.-Israel military strikes on Iran threaten to cripple regional oil output and choke off critical shipping routes.
Key factors include the blockade of the Strait of Hormuz, a vital chokepoint for global oil trade, and production cuts from major oil exporters like Iraq, Qatar, Kuwait, and the UAE, caused by limited storage and refining capacity. Kuwait's National Petroleum Company has already announced production cuts due to ongoing security threats and disruptions to shipping.
Despite efforts by other nations to boost supply, analysts predict that the oil market will continue facing significant shortages, with geopolitical risk premiums expected to stay elevated. This surge in oil prices adds further strain to a struggling global economy.
Surging oil prices have triggered turbulence across global financial markets, sending major stock indices into sharp decline. In Asia, the Tokyo Stock Exchange saw heavy losses on Monday, with the Nikkei 225 plunging over 7 percent. The South Korean stock market also suffered, with the KOSPI 200 futures index falling by more than 6 percent, triggering a temporary halt to automated selling.
European markets faced a parallel selloff as panic spread across the continent, with EUROSTOXX 50 futures and DAX futures both sliding 3.2 percent, and FTSE futures dropping 1.7 percent.
In the United States, stock markets reacted with notable volatility, as S&P 500 futures shed 2.1 percent and Nasdaq futures dived 2.5 percent. Investors are increasingly concerned that the surge in oil prices will lead to higher production costs and rising inflation, which could further undermine economic growth as the recovery from the pandemic remains fragile.
The current market volatility highlights escalating concerns over the long-term structural damage caused by the U.S.-Israel strikes on Iran. With the global economy still precarious, this escalation risks stalling nascent recovery trends, creating ripple effects that will resonate well outside the Middle East. ■
