World News
Global Stock Market Retreats as $80 Oil and Middle East War Rattle Investors
Global energy prices have surged and stock markets have fallen sharply as a deepening military confrontation between the United States and Iran sparks fears of a wider regional conflagration.
The price of Brent crude jumped nearly 10% to top $80.14 per barrel on Monday morning, 2 March, while European natural gas futures skyrocketed by 24.89%.
The spikes follow reports of large-scale Israeli strikes on Tehran and continued American-led operations against the Islamic Republic, which have now entered their third day.
Supply Chains Under Threat
The primary driver of the market volatility is the effective closure of the Strait of Hormuz. Major global shipping firms are now avoiding the vital artery—a “nerve centre” for world trade—due to the escalating hostilities.
Kat Hudson, director of investment strategies at Hargreaves Lansdown, warned that investors are increasingly concerned over “supply chain disruptions” and the subsequent “risk of higher inflation.”
Market Reactions
Despite the significant price swings, analysts describe the financial reaction as “orderly” rather than a panic.
- Equities: London’s FTSE 100 fell 1.04%, while Paris lost 1.92% and Frankfurt dropped 2.09%. Madrid saw the steepest European decline at 2.96%.
- Safe Havens: Gold gained 2.53% to reach $5,412.75 per ounce as investors sought security.
- Currency: The US dollar rose 0.93% against the Euro, bolstered by its status as the primary currency for oil settlements.
“For such an unprecedented global event, the financial market reactions remain moderate for the time being,” noted Kathleen Brooks, research director at XTB.
She suggested markets may be betting on a conflict that remains limited in duration.
Winners and Losers
The shift in the geopolitical landscape has created a stark divide across industrial sectors:
| Sector | Impact | Key Movements |
| Energy Majors | Surging | BP (+4.70%) and Shell (+5.32%) jumped in London; TotalEnergies rose 3.97% in Paris. |
| Defence | Gaining | BAE Systems climbed 7.20%, while Thales and Saab also saw significant gains. |
| Aviation & Travel | Plunging | Easyjet fell 4.22% and AirFrance-KLM dropped 7.24%. Hotel group Accor plummeted 9.50%. |
Regional Escalation
The market turmoil comes as the conflict expands into Lebanon, where Israel is conducting strikes following fire from Hezbollah.
Reports of heavy explosions have also emerged from Dubai, Doha, and Manama.
With the first American casualties reported and Donald Trump indicating the possibility of an operation lasting several weeks, the determination shown by all sides has heightened international anxiety over a total regional flare-up.
Source: Le Mauricien
