Oil Prices Surge Amid Middle East Tensions and US Inflation Fears

Global markets took a hit on Monday as oil prices surged nearly 1.5% to $97.60 per barrel, sparking concerns about the potential impact of higher energy costs on central bank interest rate decisions.

The increase in Brent crude comes amid rising tensions in the Middle East and European political uncertainty, with investors watching upcoming U.S. inflation data closely.

Central banks have shown patience during previous energy shocks, supporting asset prices and the credit cycle, according to Bruce Kasman, global head of economics at JPMorgan.

The jump in oil prices has raised concerns that higher fuel and food costs could influence central bank decisions, with diesel prices reaching record levels and being around 90% above pre-conflict levels.