MANILA, Philippines — Global financial markets remained under heavy pressure on Monday as crude oil prices held firm above the $100-per-barrel threshold, sparking a widespread sell-off in equities. Investors continued to pull back from risky assets, tracking the escalating conflict in the Middle East, which threatens to disrupt major energy supply routes and further destabilize an already fragile global economy.
In international markets, Brent crude and West Texas Intermediate (WTI) both maintained their elevated positions, fueled by fears of a regional spillover that could involve major oil-producing nations. Market analysts warn that if the tensions do not ease, the prolonged period of high energy costs could act as a significant “tax” on global consumption, leading to a period of stagflation—characterized by stagnant growth and high inflation.
“The uncertainty surrounding the scale and duration of the conflict is keeping the ‘war premium’ on oil very high,” a market strategist noted. “As long as there is a risk of supply interruptions in the Strait of Hormuz or surrounding areas, we expect energy prices to remain volatile and biased toward the upside.”
The surge in oil prices has triggered a domino effect across global stock exchanges. Major indices in New York, London, and Tokyo saw significant dips as sectors sensitive to energy costs—such as aviation, logistics, and manufacturing—faced downgraded earnings expectations. Conversely, energy and defense stocks were among the few outliers seeing gains as capital rotated into “safe haven” and commodity-linked sectors.
For emerging markets like the Philippines, the combination of high oil prices and a strengthening US dollar presents a dual challenge. Local economists are closely watching the impact on domestic fuel prices and transportation costs, which are primary drivers of consumer inflation. The Philippine Stock Exchange (PSE) also mirrored the global trend, with the benchmark index retreating as investors reassessed the impact of external shocks on local corporate profitability.
As the situation evolves, central banks worldwide are being placed in a difficult position, forced to balance the need to curb energy-driven inflation with the risk of stifling economic growth through further interest rate hikes.
