Oil prices surged on Monday, reaching 2023 highs, as the US-Israel conflict with Iran sparked a sell-off in global stock markets. Economists warn that the Middle East war could trigger a global economic shock, with rising energy prices threatening to boost inflation and weaken growth.
While prices eased on Tuesday after Donald Trump suggested the conflict could end 'very soon', oil continues to trade at elevated levels. The crisis has raised fears of stagflation—a combination of stagnant economic activity and rising inflation—as the energy supply crunch risks driving up costs across economies.
Analysts caution that sustained high oil prices could force central banks to keep interest rates higher for longer, dampening investment and consumer spending. The situation remains fluid, with markets closely watching for any escalation or de-escalation in the region.
