Oil Prices Surge, Global Stocks Fall Amid Rising Middle East Tensions

Oil prices soared on Thursday, while major global stock markets mostly declined as escalating tensions in the Middle East raised concerns among investors. This followed U.S. President Joe Biden’s statement that he was considering Israeli strikes on Iranian oil facilities, in response to Tehran’s missile attack on Israel.

Brent crude, the international oil benchmark, rose over 5% to $77.62 per barrel, while U.S. crude (West Texas Intermediate) saw a similar increase, reaching $73.71 per barrel.

In contrast, major stock markets, including the U.S., ended the day with losses. The S&P 500 fell 0.2%, while European indices in London, Paris, and Frankfurt also closed in the red. Meanwhile, the dollar gained strength due to its safe-haven status.

The geopolitical tensions center around Israel’s conflict with Tehran-backed Hezbollah in Lebanon, with fears of the situation escalating into a broader regional war. Iran, a key supporter of Hezbollah, has threatened further retaliation if Israel counterattacks.

Stock Market Impact:

• Dow Jones: Down 0.4%
• S&P 500: Down 0.2%
• Nasdaq: Down 0.1%
• FTSE 100 (London): Down 0.1%
• CAC 40 (Paris): Down 1.3%
• DAX (Frankfurt): Down 0.8%

While the jump in oil prices reflects concerns about supply disruptions, analysts suggest the increase may be tempered by rising U.S. stockpiles and Libya’s resumption of oil production after ending a month-long blockade.

Investors are also closely watching upcoming U.S. jobs data, which could influence the Federal Reserve’s interest rate decisions. The report is expected to provide further insights following recent signs of stronger-than-expected private sector hiring.