JOHANNESBURG, Mar 2 – Oil prices advanced sharply on Monday while global equities moved lower, as escalating military tensions in the Middle East heightened fears of prolonged disruption to energy supplies and renewed inflationary pressure.
Global benchmark Brent crude rose 6.4% to $77.57 a barrel after briefly climbing above $82 during intraday trade. West Texas Intermediate gained 6.2% to $71.17 per barrel. Meanwhile, safe haven demand lifted gold 1.6% to $5,360 an ounce.
Donald Trump indicated in remarks to the Daily Mail that hostilities could extend for another month, adding in a social media post that military action would persist until U.S. objectives are achieved.
Market focus has centred on the Strait of Hormuz, a critical chokepoint through which roughly one fifth of global seaborne crude shipments and about 20% of liquefied natural gas exports pass. Although the strait remains technically open, vessel tracking data shows tankers accumulating on both sides, reflecting heightened security risks and possible insurance constraints.
Jorge Leon, head of geopolitical analysis at Rystad Energy, said the effective slowdown in traffic through the waterway is already constraining flows, potentially preventing up to 15 million barrels per day from reaching global markets. He warned that absent signs of de-escalation, oil could see further upward repricing.
A sustained rise in crude prices could complicate the global economic outlook, acting as a drag on consumption and business investment while reigniting inflation concerns that many central banks have worked to contain.
The OPEC+ group agreed on Sunday to raise output by 206,000 barrels per day for April. However, analysts note that even additional barrels may struggle to reach end markets if shipping through the Gulf region remains disrupted.
Alan Gelder, senior vice president of refining and oil markets at Wood Mackenzie, drew parallels with the 1970s Middle East oil embargo, which triggered a sharp spike in crude prices. Adjusted for current market conditions, he suggested that surpassing the equivalent of $90 a barrel would be plausible if supply losses deepen.
Investors are now weighing whether the conflict marks a temporary supply shock or the beginning of a longer period of energy market instability with broader economic consequences.
