Oil Prices Remain Above $100 Amid Middle East Conflict Impact

Global oil prices remained above $100 per barrel on Friday as supply disruptions linked to escalating tensions in the Middle East continued to unsettle financial markets, sending stock prices lower and raising concerns about the broader global economy.

With the conflict entering its third week, equity markets declined further as investors worried that a prolonged crisis could fuel inflation and slow economic growth worldwide.

The price of Brent crude, the international benchmark for oil, briefly dipped below $100 during the trading session, pushing stocks slightly higher before rebounding above the $100 mark and sending equities back into negative territory.

Market analysts said crude oil movements are currently dictating the direction of global markets. According to Fawad Razaqzada of Forex.com, traders are struggling to determine a fair value for oil amid the release of emergency reserves and the temporary relaxation of sanctions on Russian oil shipments.

Energy prices have surged further following Iran’s closure of the Strait of Hormuz, a key maritime route through which about one-fifth of the world’s crude oil and liquefied natural gas supply passes.

Analysts warn that rising oil prices could intensify fears of a global energy crisis and push inflation higher. Joshua Mahony of Scope Markets said inflation concerns remain central for investors as elevated energy prices ripple through the global economy.

In response, major central banks that were previously expected to cut interest rates may now pause or even raise borrowing costs to curb inflation, with seven central banks scheduled to hold policy meetings next week.

Meanwhile, economic data from the United States showed fourth-quarter growth was revised down to 0.7 percent, while the Federal Reserve’s preferred inflation gauge eased to 2.8 percent in January, still above its two-percent target.