Concerns over the region’s oil supplies increased as a result of the economic downturn at a time when they were already high due to Saudi Arabia and Russia’s output cuts.

Energy costs are a major contributor to price increases, so it has also rekindled concerns about the impact on inflation, which is causing central banks new problems as they attempt to scale back interest rate increases to prevent recessions.

More than 1,000 people have died as a result of the surprise hit and Israel’s consequent declaration of war. This has sparked worries that a possible conflict expansion may involve the United States and Iran.

“Key for markets is whether the conflict remains contained or spreads to involve other regions, particularly Saudi Arabia,” said ANZ Group’s Brian Martin and Daniel Hynes.

“Initially at least, it seems markets will assume the situation will remain limited in scope, duration, and oil-price consequences. But higher volatility can be expected.”

In early Asian trading, both major contracts rose more than 5% before lightly declining.

Nevertheless, Stephen Innes of SPI Asset Management issued the following caution: “Historical data implies that oil prices tend to experience sustained gains after the Middle East crisis.”

“Meanwhile, stocks tend to eventually recover and trend higher after an initial period of volatility. Safe-haven assets like gold and Treasurys, which initially see gains during such crises, tend to fade from their initial price spikes as the situation stabilises.

“But with Middle East analysts considering this to be a pivotal moment for Israel, the view looks incendiary in any current scenario.”

There are concerns that the bank would increase rates one more time before the end of the year, with officials determined to control inflation and keep it at their target level of two percent.