The International Energy Agency (IEA) has proposed the largest release of emergency oil reserves in its history, between 300 and 400 million barrels, to control sharp oil price increases caused by the Middle East war. This exceeds the 182 million-barrel intervention in 2022 after Russia's invasion of Ukraine and includes US strategic reserves and those of other OECD countries. However, some analysts doubt that these reserves can quickly cover the daily supply shortfall of 11 to 16 million barrels from the Persian Gulf

US markets experienced sharp volatility while Brent crude traded near $90, with S&P 500 futures fluctuating between gains and losses and Oracle standing out with a 10% premarket rise. Tensions in the Persian Gulf and Strait of Hormuz, including attacks on ships and threats from Iran, have pressured oil supply, and the International Energy Agency proposed releasing 400 million barrels of emergency oil. Investors are concerned about rising inflation and aggressive central bank responses, while JPMorgan has marked down loan values and imposed credit limits. February US inflation data will be closely watched on Wednesday to gauge the Federal Reserve's monetary policy path and pressure on risk assets.

European Central Bank policymakers, including Peter Kazimir, Christine Lagarde, and Villeroy, emphasized high inflation risks and the potential impact of conflicts such as the Iran war. Despite Kazimir's warning about a possible rate hike, most members stressed caution and patience. They believe negative oil supply shocks slow economic growth and raise inflation, and an early rate hike could trigger a recession. Markets expect about 33 basis points of rate increases by year-end, with a 60% probability of a hike in June, though no short-term decision has been announced.

The Australian dollar has emerged as an unexpected haven amid the Iran crisis, rising to 71.68 US cents, its highest level since June 2022 and a 35-year high against the yen, supported by higher oil and gas prices and expectations of an RBA rate hike. Investors expect rates to rise on March 17, and Australia's position as a major energy exporter supports the currency. Markets forecast a roughly 33% chance of the Australian dollar reaching 75 US cents within three months, and the currency remains relatively resilient to global volatility.