Today Fundamental Analysis: Oil Surges Above $113 as Escalating Geopolitical Tensions Rattle Energy Markets

U.S. stock futures plunged at the start of the week as oil prices surged amid the escalating U.S.-Iran conflict, raising fears that sharply higher energy costs could slow the U.S. economy. Dow futures dropped more than 1,000 points. while S&P 500 and Nasdaq 100 futures fell just over 2%.

Oil markets drove much of the volatility, with West Texas Intermediate crude jumping about 25% to above $112 per barrel and Brent crude climbing past $113. Prices spiked after several Middle East producers reduced output following the continued closure of the Strait of Hormuz, a crucial global oil transit route. Kuwait announced production cuts, while Iraq’s output reportedly dropped by around 70%, intensifying supply concerns.

In Asia, South Korea’s Kospi plunged more than 8% on Monday. The drop was led by heavy losses in major tech stocks.

Gold fell at the start of the week during the Asian session, though it found some support just above the $5,000 psychological level. The drop was driven by a 25% surge in crude oil prices, which fueled inflation fears and reduced expectations for near-term US Federal Reserve rate cuts, while lifting the US Dollar (USD) to its highest level since November 2025.

The US Dollar Index (DXY) rose above 99.60 during Monday’s Asian session, marking its highest level since late November 2025, as escalating geopolitical tensions in the Middle East boosted demand for the dollar as a safe-haven currency.

However, the DXY faces some pressure from weaker-than-expected US employment data. February Nonfarm Payrolls fell by 92,000, missing forecasts for a 59,000 increase and following a revised gain of 126,000 in January. While the strong geopolitical backdrop supports the dollar, disappointing labor data could temper its near term gains.