Brent crude surged to $120 per barrel, triggering a global energy crisis and sending governments scrambling amid the ongoing conflict in West Asia.

Experts said the global economy is facing its most significant threat since the 1970s as energy markets face a massive supply shock due to the escalating war in the Gulf, where both Iran and US-Israel targeted major oil infrastructure over the past three days.

According to reports, benchmark Brent crude has surged past $118 per barrel with some intraday trading sessions seeing prices spike dangerously close to the $120 mark. This is primarily driven by the effective closure of the Strait of Hormuz, a vital maritime artery through which approximately 20 percent of the world’s total petroleum and LNG (liquefied natural gas) flows daily.

With the Islamic Revolutionary Guard Corps (IRGC) claiming control over the strait and threatening ships attempting to pass, there has been a near-total halt of tankers carrying oil from major producers like Saudi Arabia, Iraq, and Kuwait.This has threatened global economic stability, resulting in a surge in “imported inflation" as fuel costs cascade through industrial supply chains.

Experts said every 10 percent rise in oil prices typically adds 0.4 percent to global inflation, and sustained high prices could slash global GDP growth by up to 0.25 percent.As financial markets in Asia and Europe plunge, governments are desperately seeking ways to insulate themselves from the crippling energy costs.

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Asian countries, which are the most exposed to the crisis due to their extreme reliance on hydrocarbons from West Asia, have been the first to implement drastic emergency measures to shield their economies.

Japan and South Korea, which import 95 percent and 70 percent of their oil from West Asia are the most impacted in Asia.

In South Korea, President Lee Jae Myung has announced the introduction of fuel price caps for the first time in nearly 30 years to alleviate the burden on the manufacturing-heavy economy.

“We should swiftly introduce and decisively implement a price ceiling system for petroleum products that have recently seen excessive price increases," Lee said during a recent cabinet meeting.

Source: World News in news18.com, World Latest News, World News