SINGAPORE — Global financial markets remained volatile on Tuesday as escalating tensions involving Iran and key Middle East oil shipping routes fueled another surge in crude prices, prompting investors to reassess inflation risks and the outlook for economic growth.
Brent crude climbed above $85 a barrel during trading after rising sharply in the previous session, while U.S. West Texas Intermediate crude also advanced, reaching its highest level in about a month. Traders cited heightened concerns over potential disruptions to energy supplies moving through the Strait of Hormuz, one of the world's most important oil transit corridors.
The latest market moves followed renewed military exchanges involving the United States and Iran and reports of attacks affecting commercial shipping in the Gulf. Shipping activity through the Strait of Hormuz has slowed as security concerns mounted, increasing uncertainty over near-term crude exports from the region, according to market participants and shipping industry sources.
Equity markets reflected the growing caution. Major European indexes opened lower, while U.S. stock futures pointed to continued pressure after technology shares led declines on Wall Street in the previous session. Asian markets produced mixed performances as investors weighed geopolitical risks against stronger-than-expected economic data from China.
Analysts said higher oil prices could complicate the outlook for inflation at a time when investors are closely monitoring central bank policy. Rising energy costs may feed into consumer prices and increase expectations that policymakers will keep interest rates elevated for longer if inflationary pressures persist.
Physical oil markets also showed signs of tightening. Reuters reported that Middle East spot crude prices strengthened markedly, while refining margins for diesel, jet fuel and fuel oil improved amid concerns over possible supply interruptions. Some Asian refiners have begun seeking alternative cargoes from suppliers outside the Gulf to reduce exposure to potential shipping disruptions.
Market participants said much of the recent price movement reflects uncertainty over whether the conflict will materially disrupt oil flows rather than confirmed supply losses. Analysts noted that further developments affecting tanker traffic, shipping security or official policy toward the Strait of Hormuz are likely to remain key drivers of energy prices and broader financial markets in the coming days.
