Brent Heads for Record Monthly Gain as Iran War Keeps Markets on Edge

Oil prices are set for a record monthly rise as the ongoing Middle East conflict continues to drive volatility across global markets. At the same time, Asian equities are heading for their steepest decline in years, reflecting growing concerns over inflation and economic slowdown.

Brent crude was last trading around $113 per barrel, up slightly on the day and on track for a monthly surge of about 56%—its largest on record. US crude held near $103 per barrel, also set for a monthly gain of roughly 54%.

Markets Turn Volatile Amid Escalating Conflict

Global markets have remained highly unstable as tensions between the US, Israel, and Iran continue to escalate.

Investor sentiment has shifted from reacting to short-term developments to broader concerns about a prolonged conflict. While some optimism emerged after reports suggested a possible de-escalation, uncertainty remains high.

Asian Markets Face Sharp Declines

Asian equities have come under significant pressure during the month:

• Regional stock index down over 13%
• Japan’s Nikkei: down nearly 13%
• South Korea’s Kospi: down over 18%

The declines reflect the heavy reliance of Asian economies on Middle Eastern energy supplies and the rising cost pressures from higher oil prices.

Inflation Concerns Weigh on Global Outlook

Rising energy prices have increased fears of persistent inflation, leading to a shift in expectations for global interest rates.

Central banks are now expected to maintain tighter monetary policies, reducing earlier expectations of rate cuts. Bond markets have also weakened, with yields rising sharply during the month.

At the same time, the US dollar has strengthened, posting its biggest monthly gain in several months as investors seek safer assets.

Currencies and Commodities React to Uncertainty

Asian currencies have come under pressure, with several reaching record lows against the US dollar.

Meanwhile, gold prices have moved higher as investors turn to safe-haven assets amid ongoing geopolitical risks.

Market Outlook

With the conflict showing no clear signs of resolution, markets are expected to remain volatile.

While oil prices continue to reflect supply concerns, sustained high energy costs could begin to impact global growth if the situation persists.

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