Global Markets Plummet as Oil Prices Surge and Geopolitics Escalate

Rising oil prices and dicey geopolitics sent global markets into a tailspin on Monday. The Straits of Hormuz, a critical waterway for oil shipments, has become a flashpoint after the US military struck three Iranian tankers.

Tehran announced plans to establish a restricted zone outside the strait, further escalating tensions in the region. In response, Brent crude futures surged nearly 1.5% to $97.6 per barrel, its highest level in seven weeks.

Oil prices have skyrocketed over 35% since February, fueled by the ongoing conflict and US sanctions on Iran. Diesel prices hit record highs last week, with a staggering 90% increase from pre-war levels.

With inflation concerns mounting, central banks are likely to raise interest rates. The European Central Bank is expected to hike rates to 2.75% on Thursday, while the Federal Reserve may follow suit at its September meeting.