Global markets entered May under renewed pressure as Brent crude remained above $120 per barrel, driven by persistent conflict around Iran and continued disruption in the Strait of Hormuz.

Reuters reported that the oil spike is heavily influencing global financial sentiment, overshadowing strong earnings from major tech companies and creating fresh inflation concerns for central banks worldwide.

The Strait of Hormuz handles roughly 20% of global oil and LNG trade, making prolonged instability a major threat to supply chains across Asia, Europe, and major importing nations like India.

For businesses, elevated crude prices are increasing costs across aviation, logistics, manufacturing, and consumer goods. Freight rates and insurance premiums for shipping routes have also risen sharply, adding further pressure to global trade.

Economically, central banks including the U.S. Federal Reserve, ECB, and Bank of England are facing difficult policy choices as oil-driven inflation threatens to delay expected rate cuts.

Looking ahead, analysts warn that if diplomatic progress remains stalled, energy prices could remain elevated through the second half of 2026, significantly impacting growth forecasts.

Source : Reuters.