By Matthew Anthony, Senior Market Analyst- Africa
Oil prices spiked to just above $120 over the weekend as escalations of the Israel -US-Iran war intensified, with key energy installations targeted.
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As a result, major oil suppliers are due to meet shortly to open the tap of their strategic reserves. Another contributor to the hike in oil prices has been the effectual closure of the strait of Hormuz (where 20% of the world’s oil supply goes through).
Major oil producing nations like Nigeria may profit from this conflict provided they are able to put a lid on inflation- a major consequence from rising oil prices-and use the windfall for critical budget needs while preparing for potential market shocks.
Outside of Nigeria, a wave of risk aversion engulfed global markets on Monday as ongoing conflict in the Middle East accelerated the flight to safety.
Asian shares plunged, European markets opened deep in the red while US equity futures signaled to a negative open as investors scrambled to price the chaos from the Iran conflict.
In the commodity space, oil prices jumped over 25% as major Middle East producers curbed output. Brent has gained roughly 30% this month, pushing 2026 gains to over 70% while WTI crude is up almost 80% year-to-date as of writing.
The last time oil benchmarks crossed into triple digits was back in 2022 during the Russian-Ukraine war. And for most it’s still a painful memory as geopolitical risk and covid-19 supply disruptions caused inflation to skyrocket across the globe.
In the FX space, the dollar remains supported by safe-haven demand along with the Swiss franc. However, the star performer is the Canadian Dollar which has appreciated against every single G10 currency month-to-date thanks to its sensitivity to oil markets.
Gold ended last week in losses despite the risk-off sentiment and overwhelming disappointing NFP report. Non-farm payrolls slid by 92,000, representing the biggest monthly decline in payrolls since October 2025, while the unemployment rate rose to 4.4%.
However, gold remains locked within a daily range thanks to a broadly stronger dollar and inflationary risks revolving around the conflict in the Middle East. Surging energy prices have sparked inflationary fears, forcing markets to reassess the possibility of lower interest rates.
Traders are pricing a 50% chance that the Fed cuts rates twice in 2026. The February CPI and January PCE index, which is the Fed’s preferred inflation gauge – may offer crucial insight into the path of price pressures.
Should the incoming inflation data further shave Fed cut bets, the dollar could strengthen – enforcing fresh pain on precious metals. Looking at the charts, a weekly close below $5000 may signal a steeper decline. Bulls could still fight back if $5000 proves reliable support.
