Middle East War Pushes Oil Prices Higher While Global Markets Remain Mixed

Oil prices are rising due to the Iran war and disruption near Strait of Hormuz. Global markets are mixed, while shipping costs, fuel prices and insurance rates have surged sharply. Europe is seeing higher inflation and Asia may face energy crisis. Experts warn continued conflict could push oil prices even higher, increasing pressure on economies.

Oil prices moved higher on Tuesday as the ongoing conflict involving Iran created fresh uncertainty in global markets. Investors across the world are closely watching how the situation develops, as it directly affects energy supply and prices. The price of Brent crude, a key global oil benchmark, rose slightly by 0.3 percent to $107.72 per barrel for June delivery. The May contract, which was about to expire, jumped more sharply by 2.1 percent to $115.17 per barrel.

At the same time, US oil prices also climbed, showing that the impact of the conflict is being felt across different markets.

Why oil prices are going up

The main reason for rising oil prices is fear of supply disruption. A large share of the world’s oil passes through the Strait of Hormuz, which has been affected by the conflict.

If this key route remains closed or restricted, it becomes harder to move oil from producers to buyers. This reduces supply and pushes prices higher.

Experts warn that oil prices are already “painfully high” for many economies. Higher energy costs increase the cost of transport, electricity, and goods, affecting daily life.

Inflation rises in Europe

The impact of rising energy prices is already visible in Europe. Official data shows that inflation in the eurozone increased sharply in March. Consumer prices rose by 2.5 percent, compared to 1.9 percent in February. This rise is mainly linked to higher energy costs caused by the war.

The European Commission has asked member countries to prepare quickly to secure oil supplies and manage the crisis.

Asia faces a possible energy crisis

Experts believe Asia could face the worst impact from the current situation. Jean Maynier, head of energy research firm Kpler, warned that many Asian countries do not have enough local energy resources to handle the shortfall.

Large economies such as China, Indonesia, and the Philippines depend heavily on imported energy. If supply is disrupted, these countries may face serious shortages.

This could lead to higher prices, power issues, and economic pressure across the region.

Stock markets show mixed trends

Global stock markets reacted differently to the ongoing uncertainty. In Europe, markets showed some gains. London’s FTSE 100 rose by 0.7 percent, while Paris and Frankfurt also recorded moderate increases.

In Asia, however, the picture was mixed. Tokyo’s Nikkei index fell by 1.6 percent, while Hong Kong saw a small rise and Shanghai declined.

In the United States, the Dow Jones index edged slightly higher.

This mixed trend shows that investors are unsure about the future direction of the conflict and its economic impact.

US strategy adds to uncertainty

Reports suggest that US President Donald Trump may not immediately try to reopen the Strait of Hormuz, even though it is a key global trade route. Instead, the focus could be on weakening Iran’s military capabilities and pushing for a diplomatic solution later.

However, the US has also warned of possible strikes on Iran’s energy infrastructure if no agreement is reached.

This unclear strategy is adding to market uncertainty.

Fuel prices hit consumers

The rising cost of oil is already affecting ordinary people.

In the United States, petrol prices have crossed $4 per gallon for the first time since 2022. This increase reminds many of the price surge seen after the Ukraine conflict began.

Higher fuel costs mean people pay more for travel, goods, and services.

Shipping costs rise sharply

The war is not just affecting oil prices. It is also pushing up the cost of shipping goods around the world.

Many ships are avoiding the Strait of Hormuz due to safety concerns. Others are stuck in the region because of the risk of attacks.

This has reduced the number of available ships, leading to higher costs.

Tanker and fuel costs surge

The cost of hiring oil tankers has increased sharply. For large crude carriers, daily earnings have more than tripled to over $330,000.

Liquefied natural gas carriers have also seen similar increases, with costs rising to around $90,000 per day.

Shipping fuel, known as bunker fuel, has nearly doubled in price. It peaked at over $1,000 per metric tonne and remains very high.

Container shipping becomes expensive

The cost of shipping containers has also gone up.

Sending a standard 40-foot container from Asia to Europe now costs between $2,200 and $2,700. This is a rise of around 20 to 25 percent.

Routes to the Middle East and Red Sea have seen even bigger increases, with prices rising by nearly 200 percent due to war-related risks.

Insurance costs add to pressure

Ships passing through risky areas now face much higher insurance costs.

War-risk insurance can reach millions of dollars for a single trip. In some cases, it can be between 3.5 percent and 10 percent of a ship’s total value.

This adds another layer of expense for shipping companies.

Impact on global trade

Higher shipping costs mean goods become more expensive worldwide.

Companies must pay more to transport oil, raw materials, and finished products. These costs are often passed on to consumers.

This can slow down global trade and economic growth.

Experts warn that the situation could get worse if the conflict expands.

If the United States launches a ground operation or if Iran responds strongly, oil prices could rise even higher. Some analysts say prices could reach levels last seen in 2008, when oil touched nearly $150 per barrel.

The key question now is not just how high prices will go, but how long they will stay high.

The global economy is now closely linked to what happens in the Middle East.

Oil prices, shipping costs, inflation, and stock markets are all reacting to the same issue.

For now, uncertainty remains the biggest challenge. Governments, businesses, and consumers are all preparing for possible long-term effects.

(With AFP inputs)