Paris, May 18 (SANA) Oil prices have surged above $110 per barrel as disruptions in the Strait of Hormuz continue to unsettle global supply expectations, intensifying pressure on already fragile energy markets.
Bond markets also recorded significant sell-offs, pushing yields in major economies to multi-year highs.
Strategic waterway at center stage
German Finance Minister, Lars Klingbeil, warned that instability in the Strait of Hormuz poses a direct risk to global economic stability, calling for coordinated international action through the G7 framework.
European officials emphasized the urgency of restoring safe maritime flow to prevent further disruption to global trade.
Inflation fears return
Markets are increasingly pricing in the possibility of persistent inflation, raising expectations that central banks in the US and Europe could maintain higher interest rates for longer than previously anticipated.
Analysts describe the current environment as a broad market repricing driven by geopolitical risk and energy shocks.
Diverging policy approaches
The United States is advocating for stronger economic pressure on Iran, while European countries focus on limiting spillover effects to avoid recession risks.
Japan remains particularly concerned about debt market stability and potential fiscal expansion measures.
Supply chains and critical materials
The G7 agenda also includes reducing reliance on China for rare earth elements vital to defense, semiconductor, and clean energy industries.
This comes amid continued disruptions in global supply chains and rising logistics costs.
Global economic stress test
The combination of energy shocks, inflation risks, and geopolitical instability is placing the global economy under sustained pressure, with the Strait of Hormuz emerging as a key focal point of market sensitivity.
kA.MZ
