Crude oil prices are retreating after Brent hit $100 again last week as the United States and Iran took a break from hostilities over the weekend. Yet with the outcome of the war still highly uncertain, the outlook for stock markets has dimmed. Add to that Big Tech’s AI spending binge and fresh warnings about energy commodity shortages, and we are looking at extended market turbulence ahead.Last week saw a rare pile-up of adverse market developments that must have shaken the confidence of many a market bull. Besides the oil price spike, driven by the expansion of the Middle East war to the Red Sea, with Yemeni Houthis attacking two tankers, those betting on growth had to contend with President Donald Trump’s latest tariff salvo and a drop in Big Tech stocks after Google’s parent, Alphabet revealed it had burned through $6 billion in cash in the second quarter because of its AI spending. This was the first time Alphabet booked negative quarterly cash flow since it went public, the Financial Times noted, and that sparked concern among investors. All in all, Big Tech’s leaders now plan to spend a combined sum of over $725 billion this year alone to pursue their artificial intelligence plans. That is certainly an amount of money bound to give many investors a pause, mostly because returns on AI investments have been slow to materialize. Yet there is also another reason why this should be concerning. Big Tech has turned into a major driver of global energy demand—and the demand for energy commodities that inevitably stems from that.After the Houthis declared a maritime blockade on Saudi Arabia last week and demonstrated they meant it by striking tankers in the Bab el-Mandeb Strait, market watchers had to accept the fact that the Middle East war has spilled beyond the Strait of Hormuz—which remains almost entirely closed, too. This means more barrels blocked from reaching markets. On top of this, the situation in the Ukraine war developed in negative ways, as well, with Ukrainian drone attacks on the Caspian Pipeline Consortium network prompting a sharp reduction in Kazakh oil production. All in all, these developments have disturbed as much as a quarter of the world’s oil and a solid portion of the world’s gas.This is bad news for Big Tech. The industry is already short on energy supplies in the context of their planned AI data center growth. Any disturbance of energy commodity supply would only aggravate the situation further, prompting them to spend even more. Higher oil and gas prices, after all, inevitably result in higher inflation everywhere else since energy costs underpin all other costs in any given economy.“The conflict has entered a decidedly more dangerous phase,” Helima Croft, head of global strategy at RBC Capital Markets, said last week, as quoted by CNN. “It could shift the sentiment of ‘the market always finds a workaround’ camp.” This is a point that needed to be made because the camp Croft mentions has been dominant. Any report about de-escalation in Hormuz has sent oil prices lower, lulling many into a false sense of security that would make a bigger oil and gas supply shock more devastating than it could have been otherwise.All the bearish oil scenarios have been evaporating. China did cut its imports and tap its inventories to weather the initial shock, but those inventories are not endless, and China is getting nervous about the war, as evidenced by the 4% drop in oil prices last Friday, after Reuters reported that China was pushing for peace. Instead of selling, traders should have stopped and asked what it means that China is getting nervous about a war in the world’s largest oil-producing region. The reason, of course, is that the longer the war continues, the more supply would tighten.Inventories, meanwhile, are depleting across the world. Governments rushed to pull millions of barrels from these to keep a cap on retail fuel prices. It helped, but once again, inventories need replenishing, and money is running low, what with the war-related inflation, with CNBC reporting that the Iran war was costing the average American household some $1,200 annually, per Moody’s Analytics chief economist, Mark Zandi.“I just don’t see how oil is going to really impact the hyperscalers,” the chief market strategist of F.L. Putnam told Bloomberg last week. Unfortunately, oil can very directly impact the hyperscalers and their investors betting on hyperscaling as the ultimate growth engine. Leaving aside the very real problem of tighter gas markets and power plant turbines for the data centers, when the price of oil goes up, so does the price of everything else, from food to semiconductors and other equipment. Things don’t really get any more impactful than this.By Irina Slav for Oilprice.comMore Top Reads From Oilprice.comSaudi Crude Tanker Goes Dark to Slip Through Bab el-MandebHormuz Tanker Crossings Sink to Lowest Level Since May as War Risk SpikesADNOC Issues Seventh Crude Tender Since June Despite Hormuz, Red Sea Risks