Global financial markets showed signs of strain on Monday as oil prices surged sharply amid the ongoing conflict involving Iran, raising concerns about inflation and economic stability.

Benchmark Brent crude climbed above $116 a barrel in early trading, marking a rise of more than 50 percent since the conflict began on 28 February, when prices were just over $70. The increase reflects growing fears over supply disruptions, particularly around the Strait of Hormuz, a vital corridor for global oil shipments.

European stock markets opened lower but showed mixed performance by the afternoon. DAX in Germany was slightly down, while the FTSE 100 in United Kingdom recovered earlier losses to trade higher. France’s CAC 40 also edged into positive territory.

The uncertain mood followed declines across Asia, where major indices dropped amid worries over rising energy costs and the possibility of further escalation. Japan’s Nikkei 225 fell sharply, while markets in South Korea, Australia, and Hong Kong also posted losses.

Analysts say the duration of the conflict is becoming a key concern for investors. Richard Hunter of Interactive Investor said that reports of growing US troop deployments in the region have heightened fears of a possible ground operation, despite conflicting signals from Washington and Tehran.

Losses on Wall Street have added to the unease. US equities recorded a fifth consecutive weekly decline, with the S&P 500 and Nasdaq 100 both entering correction territory after falling more than 10 percent from recent peaks. The Dow Jones Industrial Average also posted declines, though to a lesser extent.

The surge in oil prices has been linked to geopolitical developments, including comments by Donald Trump about the possibility of US forces targeting Iran’s Kharg Island, a major oil export terminal. The remarks have fueled speculation about further military escalation and its potential impact on global energy supplies.

Rising crude prices are already feeding into broader economic concerns. Analysts warn that sustained high energy costs could push inflation higher worldwide, complicating efforts by central banks to stabilize growth.

In response to the mounting risks, finance and energy officials from the G7 are scheduled to hold an emergency meeting to assess the situation and coordinate potential responses. It marks the fourth such high-level discussion since the conflict began.

Investors remain cautious as markets attempt to gauge the trajectory of the conflict and its economic fallout. The combination of volatile energy prices, geopolitical uncertainty, and weakening equity markets is expected to keep sentiment fragile in the days ahead.

As the prospect of de-escalation in the Iran war remains uncertain, oil prices are rising, with the international benchmark Brent trading above $106 a barrel on Thursday morning.

After strong gains on European stock markets on Wednesday, where key indices rose between 1.3% and 1.6%, Thursday opened with losses following a sell-off in Asia. European indices fell between 0.4% and 1.2% amid conflicting statements from Iran and Washington over the progress of diplomatic efforts to end the war.

“Investors have eagerly awaited a ceasefire in the Middle East this week but once again there are mixed messages from the US and Iran, leaving markets confused,” said Dan Coatsworth, head of markets at AJ Bell. “Momentum has been lost across the main European stock indices and oil has edged higher, meaning it’s still a waiting game.”

US President Donald Trump said a deal to end the Iran war is near, even after Tehran dismissed his 15-point ceasefire plan and with thousands of troops reportedly being deployed to the Middle East. Iran presented its own proposals, while its military fired missiles at Israel. Tehran has effectively closed the Strait of Hormuz, the critical waterway connecting the Persian Gulf to global shipping lanes, and is reportedly preparing legislation to impose fees on ships passing through.

European markets extended losses through the morning session. London’s FTSE 100 fell 0.8%, Paris’s CAC 40 lost 0.7%, and Frankfurt’s DAX dropped 1.2% nearly an hour after opening.

Oil prices continued to climb, with Brent crude rising about 4% to above $106 per barrel, and US WTI crude up around 4% at $94 per barrel. The potential fees in the Strait of Hormuz, reported by Iranian media outlets close to the Revolutionary Guard, would mark a formal assertion of Tehran’s control over the waterway and could generate revenue from international shipping. Analysts warn that such a move would likely face strong opposition from Gulf Arab states, the US, and other trading nations. Bloomberg reported that the US administration is examining how a potential $200 oil price could affect the US economy, modeling extreme scenarios.

Asian markets also closed lower on Thursday, with Tokyo’s Nikkei 225 down 0.8%, South Korea’s Kospi losing 3.3%, and Hong Kong’s Hang Seng falling 1.9%. Gold prices continued their decline, dropping more than 2.7% to around $4,430 per ounce, while cryptocurrencies fell between 1.3% and 4%, with Bitcoin trading at $69,896.

Currency markets showed the US dollar strengthening against the euro and the pound, which traded at $1.1558 and $1.3351 respectively. The Japanese yen held steady at around ¥159.46 against the dollar.

Market watchers say uncertainty over Iran’s military actions and the future of the Strait of Hormuz will continue to weigh heavily on global markets, keeping investors on edge as energy prices remain elevated.