Oil and gas prices have soared and global stock markets are falling as the Middle East conflict escalates and threatens the global economy.
In the first trading session since the US and Israel launched airstrikes against Iran on Saturday, February 28, Brent crude, the international benchmark, rose as much as 13% at the start of trading. It then retreated to a high of 8%.
The increase reflects not only tensions in the region, but also the drone attack on one of Saudi Arabia's largest oil refineries, forcing its shutdown.
Analysts have warned that the escalating conflict could now spread to energy infrastructure across the Gulf, potentially causing a prolonged rise in oil prices.
Oil tankers and liquefied natural gas tankers continued to wait at the entrance to the Strait of Hormuz, the narrow passage at the entrance to the Gulf through which a fifth of the world's oil and gas flows.
Navigation through the Strait decreased drastically, eventually stopping completely, after insurance companies began cancelling coverage, causing several ships to turn back.
There are also concerns about a possible disruption to liquefied natural gas (LNG) exports from Qatar, which has caused gas prices in Europe to rise by 24%.
Gold rose and global stock markets fell. The Stoxx Europe 600, Europe's benchmark index, is down 1.3%, led by declines in airlines and the hotel sector.
S&P 500 futures indicated the index would fall 1% at the opening of Wall Street. Stocks tracking the Nasdaq index, heavily weighted with technology companies, fell 1.4%.
Gold rose 2.2% to $5,390 an ounce, as investors sought safe-haven assets, while the dollar appreciated 0.7% against a basket of other major currencies.
Asian stock markets retreated on Monday, March 2nd, with Japan's Topix index and Hong Kong's Hang Seng index falling 1.5% and 1.4%, respectively.
