Black Monday looms as US-Israel War on Iran pushes oil prices to four-year high

2026-03-23 - 07:33

Markets on edge, geopolitical turmoil and the Strait of Hormuz closure spark global uncertainty In the midst of slow-motion selloff investors brace for stagflation as energy crisis deepens The US-Israel war launched on February 28 against Iran has sent shockwaves through global markets, driving fuel prices higher, fueling inflation fears, and unsettling long-standing Western alliances. According to Tony Sycamore, US President Donald Trump’s threat to destroy Iranian energy facilities created a “48-hour time bomb” for global markets. If the threat is carried out or prolonged, it could trigger a catastrophic market selloff on Wall Street, potentially marking a “Black Monday,” while sending oil prices soaring. Sycamore warned that Tehran is likely to target Gulf energy infrastructure in retaliation, which would deepen the ongoing energy crisis, prolong high fuel costs, and expand regional instability, reports Al-Rai daily. Oil markets reacted sharply on Friday, hitting their highest settlement in nearly four years after Iraq declared force majeure on all foreign-operated oil fields and Israel attacked a major Iranian gas facility. Iran retaliated by striking energy installations in Saudi Arabia, Qatar, and Kuwait, effectively closing the Strait of Hormuz — a crucial corridor through which nearly 20% of the world’s oil and liquefied natural gas passes. The near-total closure triggered European gas prices to surge by as much as 35% last week. Despite the disruption, some vessels, including Indian and Pakistani-flagged tankers, were able to cross the strait safely. Sycamore noted that Trump’s strategy is designed to make closing the strait politically and economically untenable for Iran without causing permanent damage to Iranian oil fields, which could destabilize global energy supplies for the long term. While Wall Street has shown relative calm, markets outside the US have experienced mounting pressure. Bloomberg data shows losses of more than 8% in Japan, 7.5% in France, and nearly 7% in Germany. Analysts describe this as a “slow-motion selloff”—a gradual withdrawal from risky assets rather than a sudden crash. This apparent stability is driven by the so-called “Trump Put,” a market belief that the US president will prevent a total market collapse due to the political and economic sensitivity of fuel prices ahead of elections. However, the strategy carries substantial risks, as the underlying pressure stems not from typical economic cycles but from complex, unpredictable geopolitical developments. Most markets currently assume the crisis will be short-lived, but continued escalation could lead to stagflation: a scenario of high inflation, weak economic growth, and tough choices for central banks on interest rates. In the meantime, investors are managing risk by reducing exposure to volatile assets, increasing liquidity, and rebalancing portfolios — a strategy that explains why market crashes have not yet materialized despite mounting pressures.