Oil prices surge nearly 5% as Iran tensions shake global markets

Global financial markets turned cautious on Tuesday as crude oil prices jumped nearly 5%, pushing Brent crude close to the $100 per barrel mark amid rising geopolitical tensions and uncertainty over ceasefire negotiations in the Iran conflict.

Brent crude rose by $4.30, or 4.5%, to $99.78 per barrel, while West Texas Intermediate (WTI) gained $4.75, or 5.3%, reaching $94.36 per barrel. The sharp increase marked one of the biggest single-day gains in recent weeks, driven by fears of potential supply disruptions in global energy markets.

The rally came after renewed military tensions and stalled diplomatic efforts raised concerns that the conflict could escalate further. Market sentiment weakened further after remarks from US President Donald Trump suggested that he may not extend the current ceasefire, warning that American forces were ready to act if negotiations collapsed.

Oil and markets swing as US Iran talks face ceasefire deadline pressure

Investors are also closely watching whether Iran will participate in the latest round of peace talks, as uncertainty over diplomatic engagement has heightened fears of a prolonged conflict affecting key energy routes. The situation has added pressure to already volatile markets, with traders pricing in higher risk premiums for crude oil.

In the United States, equities ended lower amid the volatility. The S&P 500 posted a slight decline, while the Nasdaq Composite fell more sharply due to concerns that rising oil prices could fuel inflation and slow economic growth. The Dow Jones Industrial Average remained relatively stable, supported by gains in energy and defense stocks.

Sector rotation was evident in trading patterns, with oil majors rallying strongly while technology, consumer goods, and airline stocks came under pressure due to expectations of higher fuel costs and weaker demand.

European markets also closed lower, with the Stoxx Europe 600 slipping modestly. Energy and defense sectors advanced, but losses in transportation, industrials, and aviation weighed on overall performance. Analysts say markets will remain sensitive to developments in both diplomacy and supply risks.