Oil spike pushes global markets lower as Iran tensions rattle investors

Oil prices surged to around $115 a barrel following renewed tensions with Iran, triggering a broad risk-off move in global markets. The FTSE 100 fell as much as 1.7% on Monday morning, joining declines across other major indices and underscoring how energy costs are driving sentiment.

In London, trading floors watched as oil-driven volatility spread across sectors, with energy-heavy indices feeling the brunt and cyclicals under pressure as investors reassessed valuations. The London Stock Exchange’s activity reflected a broader appetite for caution amid geopolitical uncertainty.

Prices were buoyed by geopolitical risks, with Iran conflict weighing on supply expectations and fueling concerns about longer-term energy costs. Traders warned that any further escalation could sustain elevated oil levels and extend the sell-off across risk assets.

Analysts say the path for markets will hinge on oil’s trajectory and any easing of geopolitical tensions. While some see potential for energy stocks to hold up in a high-price environment, broader market participation may remain constrained until the political picture clarifies.

Investors remain cautious as central banks monitor inflation and policy paths in the face of energy shocks, with the coming weeks likely to test resilience across equities and commodities.

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