The US has escalated military strikes against Iran to unprecedented levels as the two-week conflict threatens to expand further. Both sides have issued warnings about potential escalation, with Iran's military responding to the intensified bombardment. The conflict has already disrupted global energy flows and sent financial markets into turmoil.

Oil prices have surged as traders price in the risk of major supply disruptions from the Persian Gulf. Iran is a key OPEC producer and home to the strategically vital Strait of Hormuz, through which roughly 20% of global oil passes. The Strait has been a focal point of tensions, with both sides threatening to block shipping.

Energy traders are particularly concerned about potential damage to Iran's oil infrastructure and the risk of the conflict spreading to other Gulf states. The International Energy Agency has warned that prolonged hostilities could remove up to 3 million barrels per day from global markets. With inflation already elevated, economists say the conflict could force central banks to maintain higher interest rates longer than expected.