Global financial markets came under pressure on Wednesday as Brent crude oil prices climbed above $100 a barrel amid escalating military attacks between Iran and the United States.
Brent crude rose to $100.19 per barrel, its highest level since July 24, as renewed fighting in the Middle East increased concerns about energy supplies and rising inflation.
The surge followed overnight US attacks on five Iranian crude oil carriers. Iran retaliated with missile strikes against US forces in Jordan and attacks on shipping in the region.
US Secretary of State Marco Rubio said Washington would continue targeting Iranian oil tankers in response to what he described as attempted attacks on US warships.
The rise in oil prices weighed on global stock markets. The S&P 500, Dow Jones and Nasdaq all recorded modest declines, while European shares fell to one-week lows, with industrial and banking stocks among the hardest hit.
Asian markets were mixed, although technology stocks continued to recover from their July lows, supported by strong investor interest in artificial intelligence.
Analysts warned that prolonged high oil prices could intensify inflationary pressures and make central banks more cautious about cutting interest rates.
The European Central Bank is expected to announce its latest interest-rate decision on Thursday, while the US Federal Reserve is scheduled to meet next week.
Bond markets have also been affected, with rising inflation concerns pushing government bond yields higher. Analysts said prolonged conflict and elevated energy prices could increase borrowing costs for governments and put additional pressure on global financial institutions.
Investors who had hoped for a diplomatic resolution to the Iran-US conflict are becoming increasingly cautious as renewed fighting continues into September.
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