OIL PRICES SURGE AS MIDDLE EAST TENSIONS DISRUPT MARKETS, EQUITIES STRUGGLE
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Agency Report
Global oil prices jumped sharply on Monday while equity markets came under pressure following renewed tensions in the Middle East, as peace talks between Iran and the United States reportedly stalled amid escalating conflict concerns.
Crude futures rose by about seven per cent after an Iranian news agency reported that Tehran had suspended negotiations with Washington through mediators. The development followed weekend exchanges of strikes between the United States and Iran, further heightening geopolitical uncertainty.
According to the Tasnim news agency, the breakdown in dialogue was linked to renewed clashes and the widening conflict involving Israel and Lebanon, which Iran insists must be addressed in any ceasefire agreement.
Market analysts said the situation significantly dampened investor sentiment.
“Hopes of further progress in US-Iran talks have been dashed… this has duly resulted in a spike for oil prices, since the combination of this and the weekend’s exchange of fire dramatically raises the chances of a fresh round of conflict,” said Chris Beauchamp, chief market analyst at IG.
He added that concerns over supply disruptions were intensifying as expectations of a swift reopening of key shipping routes faded.
The Strait of Hormuz, through which a significant portion of global oil and liquefied natural gas passes, has remained a focal point of concern. Analysts noted that reduced traffic through the route and prolonged geopolitical tensions are tightening supply expectations and supporting higher prices.
The oil price surge weighed on global equities, erasing early gains driven by optimism in the technology sector. Wall Street indices opened lower before recovering slightly, with the S&P 500 and Nasdaq Composite managing modest gains.
Technology stocks were supported by strong performance from major chipmaker Nvidia, which rose more than four per cent after unveiling a new AI-focused laptop chip aimed at expanding its presence in the consumer computing market.
Asian markets also reacted positively to the AI sector momentum, with Seoul’s benchmark index rising more than four per cent. Samsung Electronics surged over nine per cent, while SK Hynix also recorded gains.
Investor appetite for artificial intelligence-related stocks continues to drive global equity markets near record highs, despite ongoing geopolitical risks and inflationary pressures linked to energy costs.
In Europe, however, major indices closed lower. London’s FTSE 100 fell 0.7 per cent, while the CAC 40 in Paris and Germany’s DAX also recorded declines.
Currency markets saw the US dollar strengthen against major peers, while oil benchmarks closed significantly higher. Brent crude rose 6.6 per cent to $97.15 per barrel, and West Texas Intermediate climbed 7.6 per cent to $94.01.
Elsewhere, airline stocks were in focus after EasyJet shares jumped more than nine per cent following reports that US private equity firm Castlelake was considering a potential takeover bid. The airline described the move as “opportunistic,” while maintaining it had not received any formal offer.
Analysts say markets remain highly sensitive to geopolitical developments, with energy prices and AI-driven equities continuing to dominate investor sentiment.
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