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G7 emergency meeting set for Monday
Finance ministers from the Group of Seven industrialized nations will meet urgently on Monday to address the economic fallout from soaring oil prices and plunging stock markets, triggered by the intensifying military confrontation between the United States, Israel, and Iran.
Oil prices spike amid supply disruption fears
Global crude oil prices surged past $120 a barrel at one point on Monday, driven by concerns over prolonged disruptions to energy shipments through the Strait of Hormuz-a critical chokepoint for roughly one-fifth of the world's oil supply. Traffic through the narrow waterway has nearly halted since hostilities began over a week ago.
Brent crude, the international benchmark, climbed more than 25% to $119.50 before retreating to around $107. U.S. West Texas Intermediate (WTI) crude followed a similar pattern, trading at approximately $104 a barrel. Natural gas prices also spiked, with UK month-ahead delivery prices jumping nearly 25% to 171 pence per therm before settling at 156p.
Markets tumble as conflict escalates
Stock markets across Asia and Europe opened sharply lower on Monday, reflecting investor anxiety over the deepening crisis. Japan's Nikkei 225 plunged 5.2%, while South Korea's Kospi index dropped 6%, triggering a 20-minute trading halt to curb panic selling. In Europe, Germany's DAX and France's CAC 40 both fell by about 2.5%.
In London, the FTSE 100 index saw nearly all its components decline, with oil majors BP and Shell among the few gainers. The broader sell-off underscored fears of a prolonged conflict disrupting global energy supplies and economic stability.
G7 weighs coordinated oil reserve release
The Financial Times reported that the G7 meeting will explore a joint release of petroleum reserves, coordinated by the International Energy Agency (IEA). If implemented, this would mark the first such intervention since 2022, when reserves were tapped following Russia's invasion of Ukraine.
Participants include UK Chancellor Rachel Reeves and other finance ministers from the world's leading economies. The discussions aim to mitigate the risk of soaring consumer and business energy costs, which threaten to exacerbate inflationary pressures.
Iran leadership transition fuels uncertainty
On Sunday, Iran appointed Mojtaba Khamenei as the new Supreme Leader, succeeding his father, Ali Khamenei. The move signals the continued dominance of hardliners in Tehran more than a week into the conflict.
Over the weekend, the U.S. and Israel launched fresh airstrikes on Iranian targets, including oil depots. Iran retaliated by targeting energy infrastructure in neighboring Gulf states. Saudi Arabia reported intercepting and destroying two waves of drones en route to a major oilfield.
U.S. downplays oil price concerns
U.S. President Donald Trump dismissed worries over rising oil prices in a post on Truth Social on Sunday, framing short-term price spikes as a necessary trade-off for regional security. "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. ONLY FOOLS WOULD THINK DIFFERENTLY!" he wrote.
"People are realizing that this won't end quickly. The promises of insurances and objectives laid out by the U.S. are becoming more unrealistic."
Adnan Mazarei, Peterson Institute for International Economics
Energy Secretary Chris Wright told U.S. broadcasters that Israel, not the U.S., was responsible for strikes on Iran's energy infrastructure. Meanwhile, data from motorists' group AAA showed the average U.S. gasoline price rose 11% last week to $3.32 per gallon.
