Crude spikes above $115 amid Middle East conflict, Markets rattled

Global financial markets tumbled on Monday as surging crude oil prices driven by the escalating Iran war triggered sharp sell-offs in equities, with Indian benchmark indices Sensex and Nifty plunging more than 3 per cent .

The 30-share BSE Sensex crashed 2,494.35 points, or 3.16 per cent, to 76,424.55 , while the NSE Nifty fell 752.65 points, or 3.07 per cent, to 23,697.80 , reflecting investor anxiety over rising energy costs and a weak global market trend.

The fall came as Brent crude prices surged sharply , briefly approaching $120 per barrel before easing slightly. The global benchmark had jumped more than 17 per cent to around $108.5 per barrel , amid fears that the ongoing conflict in the Middle East could disrupt global energy supplies.

Another factor pushing costs higher is the sharp rise in war-risk insurance premiums for oil tankers operating in the Persian Gulf region . Shipping companies are paying significantly higher insurance charges to transport crude through conflict-prone waters, particularly near the Strait of Hormuz , a crucial route through which nearly 15 million barrels of crude oil about 20 per cent of global supply move daily , according to energy research firm Rystad Energy . Many tankers are either delaying voyages or seeking alternative routes, tightening supply further.

Several oil-producing nations in the region, including Iraq, Kuwait and the United Arab Emirates , have reportedly reduced production as export disruptions cause storage facilities to fill up. At the same time, energy infrastructure has come under attack , heightening supply concerns.

Market sentiment was also dampened by continued foreign fund outflows , with Foreign Institutional Investors selling equities worth ₹6,030 crore on Friday , according to exchange data, though Domestic Institutional Investors bought stocks worth ₹6,971 crore .

The ripple effects are increasingly being felt by ordinary consumers . Higher crude prices often translate into costlier petrol and diesel , pushing up transport costs, food prices and overall inflation . For households already dealing with rising living expenses, prolonged high oil prices could mean higher commuting costs and more expensive essential goods .

Global markets mirrored the nervous mood. South Korea’s Kospi plunged over 6 per cent , while Japan’s Nikkei 225 dropped nearly 5 per cent , with markets in Shanghai and Hong Kong also ending lower.

Analysts warn that if crude oil remains above $100 per barrel for long , it could increase India’s import bill, widen the trade deficit and slow economic growth , posing broader challenges for both markets and consumers.