Global markets dropped Monday after oil prices surged above $100 per barrel, driven by fears that the ongoing conflict involving the U.S., Israel, and Iran could disrupt global energy supplies.
U.S. Markets Slide
The major U.S. stock indexes opened sharply lower:
- Dow Jones Industrial Average fell 720 points (1.5%)
- S&P 500 dropped 1.3%
- Nasdaq Composite declined 1.2%
Markets around the world also tumbled. Japan’s Nikkei 225 plunged 5.2%, while Europe’s STOXX Europe 600 fell 1.7%.
Oil Prices Spike on Supply Fears
Oil prices jumped sharply as traders worried about a potential blockade of the Strait of Hormuz, a critical shipping route that carries about 20% of the world’s oil supply.
U.S. crude climbed above $100 per barrel, a 54% increase since late last month. Overnight, prices briefly approached $120 per barrel before easing.
Prices pulled back slightly after reports that finance ministers from the Group of Seven could discuss releasing oil from strategic reserves to stabilize markets.
Gas Prices Rising in the U.S.
Higher oil costs are already hitting consumers. According to AAA, the national average price for gasoline rose to $3.47 per gallon Monday, up from $2.99 last week. Analysts warn prices could exceed $4 per gallon in at least 20 states by the end of the week.
Trump Downplays Oil Spike
In a social media post Sunday, Donald Trump minimized concerns about the surge in oil prices.
“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” Trump wrote.
The market volatility comes after the conflict intensified following the killing of Iran’s Supreme Leader Ali Khamenei in Tehran. His son, Mojtaba Khamenei, was selected Sunday to succeed him.
For more on the oil prices, stay tuned to Que Onda Magazine.