Oil Soars as Middle East Conflict Widens, Global Markets Sell Off 

Financial markets turned sharply risk-off on Tuesday as mounting fears of an inflation surge rippled across stocks and bonds worldwide.

Global equities slid as disruptions to Middle East energy supplies threatened to reignite price pressures. Crude oil gained around 5%, while European wholesale natural gas surged a punishing 40%.

United States

After opening sharply lower for the second consecutive session, US stocks staged a partial recovery but failed to match Monday’s resilience, ending the day notably in the red. The major averages clawed well off their intraday lows yet remained firmly in negative territory.

The Dow Jones closed down 403 points or 0.8%, at 48,502, having plummeted more than 1,200 points earlier in the session to its lowest intraday level in nearly three months. The Nasdaq fell 232 points or 1%, to 22,516, and the S&P 500 slid 64 points or 0.9%, to 6,816 — both indexes having plunged as much as 2.7% and 2.5%, respectively, touching three-month lows at their worst.

WTI crude climbed above $75 a barrel, extending a two-day gain of approximately 11%. Brent traded near $81 a barrel as the widening Middle East conflict and shipping disruptions through the Strait of Hormuz kept supply risks firmly in focus.

India

Every $1 increase in crude oil raises India’s annual import bill by approximately $2 billion.

Data indicate that a 10% rise in crude prices could raise the Consumer Price Index (CPI) and the Wholesale Price Index (WPI) by 40 to 80 basis points, while widening the current account deficit by approximately 30 basis points.

Beyond the energy sector, the paints, lubricants, aviation, and chemicals industries will face significant margin pressure, as oil and its derivatives account for 40% to 70% of their total raw material costs.

Prolonged tensions among the United States, Israel, and Iran are mounting pressure on India across its current account, inflation outlook, and currency stability. Elevated crude prices stand to raise the country’s import bill, widen its current account deficit, weaken the rupee, stoke inflation, and trigger foreign capital outflows.

Indian markets are expected to open 2–2.5% lower as leveraged positions are unwound amid the geopolitical developments of the past two days

Source: HSL Prime Daily, 04 March 2026