Escalating Middle East Tensions and Surge in Oil Prices Trigger Global Market Sell-Off

11:27 - 18.08.2026


August 18, Fineko/abc.az. Fading hopes for a peace agreement with Iran and fears that rising oil prices will fuel inflation have triggered a decline across global equity and bond markets.

US President Donald Trump’s declaration that he is not interested in extending the temporary ceasefire with Iran, coupled with renewed clashes in southern Lebanon, has significantly elevated geopolitical risks. Against this backdrop, Brent crude rose to $91.3 per barrel. Rising oil prices have reignited speculation that the Federal Reserve might raise interest rates before year-end, pushing the yield on 30-year US Treasuries to its highest level since 2007.

Analysts note that the combination of high oil prices, surging Treasury yields, and heightened geopolitical risk will keep global markets volatile. Consequently, the MSCI Asia Pacific Index dropped 0.8%, Japan's Nikkei 225 slipped 2%, and South Korea's Kospi fell 2%. Gold remained steady at around $4,400 per ounce.