Oil tops US$100 as war rages, US stock futures drop

2026-03-08 - 23:03

Flames rise at an oil refinery hub in Fujeirah, UAE, after debris from an intercepted drone sparked a fire. (EPA Images pic) SINGAPORE: Oil rose over US$100 a barrel and US stock futures fell as escalating hostilities in the Middle East and widening stress on oil shipping and infrastructure has global investors braced for more turbulence. The dollar gained. West Texas Intermediate surged 22% to as high as US$111.24 a barrel at the open after last week added a record 36%. Oil markets faced the prospect of further upheaval this week as the conflict involving Iran entered its second week, with major producers curbing output, storage hubs nearing capacity and traffic through the Strait of Hormuz effectively halted. US equity-index futures tumbled 1.7% at the open. Asian stocks also looked set to fall. The dollar strengthened against all its Group-of-10 peers on Monday. “This is no longer just about Hormuz being effectively shut, it is about supply disruption spreading deeper into the region,” said Dave Mazza, chief executive officer at Roundhill Financial. “That is the kind of shift that can push already-nervous investors to take more risk off the table.” Selling swept across regions and asset classes last week as the geopolitical flareup added fresh stress to markets that are already under pressure from AI disruptions and worries about the potential for cracks in credit markets. The escalating crisis has left investors caught between the risk of renewed inflation stemming from elevated oil prices and signs of cooling in the US labor market that may strengthen the case for monetary easing. On Sunday, Iran pressed attacks on Mideast neighbours, while Israel struck fuel depots in Tehran and threatened the Islamic Republic’s power grid. President Donald Trump warned the US would consider targeting areas that weren’t previously aimed for. The attacks will continue “until they surrender or, more likely, completely collapse!” he said in a social media post. The Cboe Volatility Index, a gauge of implied price swings in the S&P 500 known as the VIX, surged toward 30 on Friday, pushing the spot price above its three-month futures in the largest inversion in almost a year. “The worst is yet to come in the stock market reaction,” said Michael O’Rourke, chief market strategist at JonesTrading. “I would expect more of a risk-off mood until we get some tangible positive news.” Meanwhile on Friday in the US, nonfarm payrolls fell 92,000 last month, one of the largest declines since the pandemic. While some of the downside was expected, like a temporary dent from striking healthcare workers and a potential hit from bad weather, a wide array of industries cut jobs. The unemployment rate rose to 4.4%.