Oil Price Surge, Geopolitical Tensions Weigh on Global Markets

Rising oil prices and escalating tensions in the Middle East weighed on global markets on Monday.

Brent crude futures rose 1.3% to $97.5 a barrel, the highest level in seven weeks, as Iran announced plans to establish a restricted zone outside the Strait of Hormuz.

The oil price surge has been particularly pronounced in recent days, with prices rising almost 8% last week and now standing at 35% above their pre-war levels.

The sharp increase in fuel costs is contributing to higher inflation rates worldwide, prompting central banks to consider raising interest rates. The European Central Bank is set to hike its benchmark rate to 2.5% on Thursday, with futures markets pricing in another rise to 2.75% by December.