Middle East Tensions Ignite Global Oil Market Turmoil

Oil prices surged near $120 per barrel amid intensified Middle East conflict affecting production and shipping. Potential strategic reserve releases were considered to stabilize markets. Global economies face rising fuel costs, impacting inflation and consumer spending. Iranian oil exports, mainly to China, may disrupt further, raising energy prices.

Oil prices soared early Monday, reaching near $120 per barrel, as escalating conflict in the Middle East jeopardized production and transportation. Brent crude hit $119.50 per barrel but later eased to $107.80, while West Texas Intermediate peaked at $119.48 before declining to $103 per barrel.

The ongoing war has severely impacted civilian infrastructure, with Bahrain accusing Iran of targeting a crucial desalination plant and Israel retaliating on oil depots in Tehran. Key G7 nations reportedly considered releasing strategic oil reserves to ease market pressures, while President Donald Trump cited ample U.S. supplies as a stabilizing factor.

The geopolitical unrest threatens the crucial Strait of Hormuz, halting tanker passage and affecting oil flows from major suppliers. Rising energy costs are straining economies, with higher inflation impacting household budgets globally. Meanwhile, analysts warn sustained high oil prices could overload the global economic system.

(With inputs from agencies.)