Global oil prices jumped by more than 5 percent on Wednesday after renewed military exchanges between the United States and Iran raised fears of disruptions to energy supplies.

Brent crude climbed above $78 per barrel, reaching its highest level in nearly three weeks as investors worried about the security of shipping through the Strait of Hormuz, one of the world’s most important oil transit routes.

The renewed tensions came after President Donald Trump declared that the interim agreement aimed at ending the conflict with Iran was “over.”

The statement triggered fresh uncertainty in financial markets and renewed concerns about the possibility of prolonged instability in the Middle East.

Higher oil prices immediately affected global markets, with transportation and manufacturing companies facing concerns about rising operating costs.

Investors also feared that higher energy prices could contribute to inflation, complicating the decisions of central banks around the world.

Analysts noted that global oil inventories have already been reduced by months of geopolitical tensions, making markets particularly sensitive to any fresh disruptions.

Businesses that rely heavily on energy inputs are now closely monitoring developments in the region.

For now, energy markets remain highly volatile, and any escalation in the conflict could have significant consequences for global trade, inflation and economic growth in the months ahead.

Source: Reuters