WASHINGTON — Global financial markets are grappling with the economic fallout from intensified military action involving Iran, as crude oil prices have jumped 35% in the past week to reach their highest levels since 2008.

The conflict has effectively closed the Strait of Hormuz to commercial traffic, forcing tankers to seek alternative routes and adding weeks to delivery schedules. Major oil companies have suspended operations at several facilities, while insurance costs for vessels transiting Middle Eastern waters have tripled. "We're seeing supply chain disruptions that could persist for months, not weeks," said Dr. Sarah Chen, energy analyst at the Peterson Institute for International Economics.

Central banks across three continents are now reassessing monetary policy as inflation pressures mount. The Federal Reserve indicated Tuesday that emergency rate adjustments remain possible, while European Central Bank officials warned of stagflation risks. China's manufacturing sector, heavily dependent on Middle Eastern crude imports, has already reported production slowdowns at major industrial facilities.

The Biden administration has authorized releases from the Strategic Petroleum Reserve and is coordinating with allies to stabilize markets. Treasury Secretary Janet Morrison told reporters that Washington is "monitoring all economic indicators closely" while working to prevent broader financial contagion. However, analysts warn that sustained oil prices above $100 could trigger the first global recession since 2020, particularly affecting emerging markets with limited fiscal buffers.