Brent crude climbed to $86.65 a barrel on Tuesday as renewed conflict between the US and Iran heightened fears of supply disruptions and inflation.
Brent crude oil climbed to $86.65 a barrel on Tuesday afternoon, its highest level in more than a month, as renewed military strikes between the United States and Iran intensified concerns over energy supplies through the Strait of Hormuz and heightened fears of a fresh wave of global inflation.
The sharp rise in oil prices weighed on investor sentiment across global equity markets, with analysts warning that prolonged disruptions in one of the world's most important shipping routes could keep inflation elevated and force central banks to maintain tighter monetary policy for longer.
Bianca Botes, Managing Director at Citadel Global, said geopolitical developments were driving a cautious tone across financial markets.
"Tuesday morning, US futures continued to signal caution, hinting that the volatility may persist as traders reassed their positions. Asian markets mirrored the sentiment, with the tech heavy Korea Composite Stock Price Index plummeting by 2.5%. Japan's Nikkei also felt the pressure, falling by 1%. This synchronicity in market reactions across continents highlights the global interconnectedness of financial systems, where local events can dramatically sway investor sentiment worldwide," Botes said.
