Hong Kong: Rising war tensions in West Asia have triggered a major shock across the global economy, sending oil prices soaring and stock markets tumbling. As military attacks by the United States–Israel alliance entered their second week, fears of supply disruptions pushed international crude oil prices up by more than 20 percent, crossing $110 per barrel on Monday. This marks the highest level since the outbreak of the Russia–Ukraine War in 2022. Benchmark West Texas Intermediate crude oil surged over 25 percent to around $115 per barrel, while Brent crude climbed more than 23 percent to about $114 per barrel. Israeli airstrikes on Iranian oil facilities and warnings from the Islamic Revolutionary Guard Corps of retaliatory strikes on regional energy sites have intensified fears of a wider conflict. The continued closure of the strategic Strait of Hormuz since February 28 has further aggravated the global supply outlook.
The sharp spike in oil prices has rattled global financial markets, triggering a wave of sell-offs across Asia. South Korea’s markets plunged by 8 percent, Japan dropped 7 percent, and Taiwan fell by more than 5 percent, while exchanges in Hong Kong, Shanghai, Sydney, and Singapore also recorded heavy losses. The shockwaves reached India as well, with key indices such as the BSE Sensex and Nifty 50 suffering steep declines, particularly in sectors like aviation, logistics, tyres, and paints. Meanwhile, the Indian rupee weakened sharply to a record low of 92.33 against the US dollar as demand for dollars surged for oil imports. Economists warn that if the oil rally continues, the Reserve Bank of India may be forced to raise interest rates, a move that could increase borrowing costs and slow economic growth.
