Global markets reacted sharply on Monday as war shock oil prices pushed close to the $120 mark. Investors rushed to adjust positions while energy concerns intensified. As a result, oil recorded its strongest surge since mid-2022. At the same time, many traders watched the growing conflict in the Middle East. Consequently, fears about supply disruptions increased across financial markets.
First, Brent crude climbed rapidly and approached $119.50 per barrel. Meanwhile, US West Texas Intermediate reached about $119.48. Because of the conflict involving Iran, the United States, and Israel, markets expect further pressure on oil supplies. In addition, concerns about shipping routes raised alarm among investors.
Furthermore, the Strait of Hormuz remains a critical chokepoint for global oil transport. Therefore, any disruption there can quickly move prices higher. Analysts noted that the escalating conflict created a tense standoff with no immediate solution. As a result, markets reacted aggressively to the uncertainty.
Meanwhile, the war shock oil prices rally also influenced agriculture markets. Vegetable oils climbed strongly because biofuel production relies heavily on them. For example, Malaysian palm oil jumped nearly nine percent during trading. Likewise, Chicago soybean oil reached its highest level since late 2022.
Grain markets also followed the trend. Wheat prices climbed to their highest level since June 2024. In addition, corn prices reached a ten-month high. Because energy costs affect farming and transportation, higher oil prices often push agricultural commodities upward.
However, gold moved in the opposite direction. The precious metal dropped more than two percent during the same trading session. A stronger US dollar made gold more expensive for international buyers. Therefore, demand weakened despite rising geopolitical risks.
Additionally, higher energy prices triggered new inflation concerns. Investors now expect central banks to delay interest rate cuts. Consequently, US bond yields strengthened and supported the dollar. This shift placed additional pressure on gold prices.
Industrial metals also showed mixed reactions. Aluminium surged to its highest price in four years. Supply concerns emerged after several Middle Eastern smelters faced disruptions. For instance, major producers in Qatar and Bahrain declared force majeure on shipments.
At the same time, other base metals struggled under the stronger dollar. Traders often reduce exposure to commodities when the dollar gains strength. Nevertheless, aluminium continued rising due to supply fears linked to the conflict.
Overall, war shocks oil prices, which now dominate global market sentiment. Energy traders expect continued volatility if tensions escalate further. Therefore, investors across commodities, currencies, and agriculture remain on high alert.
