Investors worldwide are keeping a watchful eye on the escalating conflict in the Middle East, as tensions rise in the region.

The situation has raised concerns about the potential impact on global financial markets and energy prices.

The recent increase in hostilities between regional powers has sparked fears of disruption in the oil supply chain, given the Middle East’s crucial role as a major oil-producing region.

This has prompted investors to assess the potential risks to their portfolios and investment strategies.

Widening conflict

Investors have grown more worried about a widening conflict in recent days after the U.S. dispatched more military assets to the Middle East while Israel attacked targets in Gaza and Hamas supporters in Lebanon and Syria.

“The situation in Israel is … causing a lot of anxiety,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab.

On Friday, Brent futures settled up 2.9% at $90.48 a barrel on concerns the conflict could disrupt crude supplies. Spot gold , a popular safe haven for nervous investors, vaulted over $2,000 for the first time since mid-May.

In a note on Friday, analysts at Capital Economics said the oil market’s response to the conflict was “muted” so far.

“That said, any sign that the other countries in the region are becoming more involved in the conflict would cause oil prices to rise sharply,” they wrote.