Oil Price Surge Toward $120 Sparks Global Market Sell-Off

A sharp surge in oil prices has sent shockwaves through global financial markets, reminding investors how quickly geopolitical risk can translate into economic pressure.

Crude oil surged toward US$120 per barrel after escalating conflict in the Middle East disrupted energy supply routes and forced producers to scale back output. The move triggered a broad sell-off in equities, wiped close to $100 billion from the Australian sharemarket and pushed bond yields to levels not seen in more than a decade.

Markets are now reassessing a scenario that many investors had largely dismissed: the return of an energy-driven inflation. . .