Oil Price Surge Sparks Global Stock Market Woes
Rising oil prices and Middle East tensions pushed global stocks lower on Monday. Brent crude futures rose 1.3% to $97.5 a barrel, the highest in seven weeks.
The Strait of Hormuz was the focal point for rising tensions between Iran and the US. Tehran announced plans to create a restricted zone outside the strait, prompting concerns about oil supplies and prices.
The impact on energy markets has been significant, with diesel prices hitting record highs last week and surging 90% above pre-war levels. Central banks are now expected to raise interest rates in response to inflationary pressures.
The European Central Bank is set to hike rates to 2.5% this Thursday, with a possible further increase to 2.75% by December. Markets anticipate a 58% chance of a rate hike from the Federal Reserve when it meets on September 16.