International benchmark Brent crude briefly surpassed $119 per barrel on Thursday morning before retreating to roughly $110, triggering a widespread sell-off across global equities. U.S. West Texas Intermediate crude also saw significant gains, trading near $96 per barrel in early market action.
The sudden spike in energy costs immediately impacted Wall Street. By 10:00 a.m. Eastern Time, the Dow Jones Industrial Average fell 415 points. The S&P 500 declined 0.9 percent, pacing toward a fourth consecutive weekly loss, while the Nasdaq composite dropped 1.2 percent.
Gulf Infrastructure Strikes Rattle Supply Lines
The market volatility stems directly from escalating military conflict involving Iran. Recent strikes targeted critical energy infrastructure in neighboring Gulf Arab states, specifically hitting two oil refineries in Kuwait and Qatar’s Ras Laffan terminal, severely disrupting the global energy industry.
Qatar supplies approximately 20 percent of the world’s liquefied natural gas. Following the strike on Ras Laffan, the European TTF natural gas benchmark surged 17 percent. Investors are heavily weighing the risk of prolonged production outages and the potential closure of the Strait of Hormuz, a critical maritime route handling one-fifth of global oil shipments.
International Markets and Commodities Drop
The stock market declines extended far beyond the United States. In Asia, Japan’s Nikkei 225 plummeted 3.4 percent to close at 53,372.53. European markets mirrored the drop, with Germany’s DAX losing 2.4 percent and the UK’s FTSE 100 shedding 2.1 percent.
Precious metals also faced heavy selling pressure amid the broader market sell-off. Gold fell 4 percent to $4,697 an ounce, and silver declined 8.7 percent to $70.80. Central banks are actively monitoring the inflationary threat posed by the energy spike. The Bank of Japan held its benchmark interest rate steady at 0.75 percent, directly citing Middle East tensions, global financial volatility, and rising crude prices in its decision.