Global financial markets experienced one of the most powerful shocks in recent years on Monday, March 9. The cause is the escalation of the military conflict in the Middle East and growing fears of a prolonged energy crisis.
This is reported by Finway
Oil and Coal Hit Record Highs
The price of Brent oil surged to nearly $120 per barrel — an intraday fluctuation reached 29%, marking the largest jump in almost six years. Trump commented briefly: $100 per barrel is a “very small price” for “security and peace,” effectively indicating that the conflict will not end quickly.
At the same time, coal prices soared to their highest level since November 2024 — the Asian benchmark Newcastle coal futures rose by 9.3% to $150 per ton. Countries are actively seeking alternatives to oil and gas, which are blocked in the conflict region.
A separate blow came from the Iranian attack on the world’s largest liquefied natural gas terminal in Qatar — it supplies about 20% of global LNG shipments. Gas prices in Europe increased by 30% in one day, while Asian spot prices doubled in a week.
Markets in Panic
Since the start of the war, global stock markets have lost about $6 trillion in capitalization. Asian stocks fell by 5.6% — the largest drop since April. In South Korea, the decline even temporarily halted trading.
Foreign investors withdrew $14.2 billion from emerging Asian markets just last week — the largest outflow since at least 2009.
“The pendulum has swung towards panic. Everyone is rushing to sell or reduce risk assets,” described the situation Danny Wong, CEO of Areca Capital.
What This Means for the Global Economy
The main risk is stagflation: a simultaneous slowdown in the economy and rising inflation due to expensive energy. Expectations for a rate cut by the U.S. Federal Reserve have already shifted from July to September, and some traders are not betting on any easing of monetary policy this year.
G7 countries are discussing a coordinated oil release from strategic reserves to stabilize the markets. However, there are no specific decisions yet, and markets continue to price in a scenario of a prolonged war with no clear end in sight.