Global oil prices surged above $95 per barrel on Tuesday as U.S. President Donald Trump confirmed that military strikes against Iran could extend for weeks, triggering a sharp rise in market volatility and lifting energy sector stocks. The move underscores growing fears of prolonged regional conflict and its economic fallout.
- Brent crude surpassed $95 per barrel, CL=F reached $93.50
- VIX jumped 22% to close above 32
- XLE rose 5.4% on defensive demand
- Strait of Hormuz tanker rates increased 15%
- 6 million barrels per day of Gulf exports at risk
- 10-year Treasury yield climbed to 4.8%
Global crude oil prices spiked over 8% in early trading, with Brent crude breaching $95 per barrel and U.S. West Texas Intermediate (CL=F) reaching $93.50, reflecting heightened fears of supply disruptions in the Middle East. The surge followed President Trump's public statement that military operations targeting Iran could persist for several weeks, citing ongoing threats from Iranian-backed militias in the region. The VIX volatility index (^VIX) jumped 22% to close above 32, signaling increased investor anxiety. Defense stocks reacted strongly, with the Energy Select Sector SPDR Fund (XLE) rising 5.4% as investors rotated into sector-safe assets amid escalating geopolitical risk. The market’s reaction underscores the fragility of global energy markets under ongoing regional instability. Energy infrastructure and shipping firms faced renewed scrutiny, with tanker rates in the Strait of Hormuz climbing 15% amid concerns over potential blockades. Analysts warn that sustained conflict could disrupt 6 million barrels per day of crude exports from the Gulf, equivalent to 6% of global supply. The broader equity market showed signs of strain, with major indices retreating early in the session. The S&P 500 dropped 1.2%, while tech and consumer sectors underperformed as investors priced in higher inflation and interest rate risks. The bond market also reacted, with the 10-year U.S. Treasury yield spiking to 4.8%.