Energy Markets on Edge as Oil Prices Jump

Oil markets opened the week sharply higher after US strikes on three Iranian nuclear sites late Saturday, marking a significant escalation in Middle East tensions. 

US crude futures climbed 2.7% to hover near $75.80 per barrel, while Brent, the global benchmark, gained 2.44% to trade around $78.88. The surge comes despite recent OPEC+ announcements to boost output and US crude stockpiles swelling by over 200 million barrels since January.

The market’s nervous reaction extended to equities. US stock futures retreated across the board, with Dow contracts shedding 175 points, or 0.4%. The S&P 500 and Nasdaq futures both slipped 0.4% and 0.5%, respectively. 

The dollar, however, regained some footing, ticking up 0.3%, reflecting its traditional safe-haven appeal during geopolitical shocks, though questions linger about whether it can maintain that role under protectionist US policies.

Israeli markets rallied as investors bet the strikes would reduce immediate nuclear risks. The Tel Aviv 125 surged 1.8% to close at 2,919.62, while the TA-35 advanced 1.5% to a record 2,877.78.

What Does This Mean for Me?

The real concern for energy markets lies with the Strait of Hormuz. Roughly 25% of global seaborne oil moves through this critical chokepoint, and any Iranian retaliation could disrupt flows.

Economists warn that a prolonged supply squeeze could fuel inflation pressures, just as central banks weigh interest rate paths for the year ahead. With oil sitting near $76, traders are bracing for more volatility if regional tensions deepen.