JD - Global financial markets experienced a turbulent start to the week as a surge in oil prices triggered a widespread sell-off and intensified concerns about inflation.

Investors, rattled by the prospect of rising living costs and interest rates, fled from riskier assets into the perceived safety of the U.S. dollar.

Brent crude jumped 27% to $117.58 a barrel, marking its largest daily gain since at least 1988. U.S. crude surged 28% to $116.51, fueling fears of rapidly rising fuel costs.

The surge follows a 28% rise last week, compounding concerns about energy supply disruptions.

Asian stock markets led the decline, with Japan's Nikkei index plummeting 7.0%, adding to last week's 5.5% drop. South Korea's market fell 8.2%, while China's benchmark index declined 1.7%.

The sell-off extended to Wall Street, where S&P 500 futures fell 2.0% and Nasdaq futures dropped 2.3%. In Europe, Euro Stoxx 50 futures and Germany's DAX futures both declined 3.2%.

In bond markets, inflation fears overshadowed safe-haven considerations, driving yields higher globally. The 10-year Treasury yield reached 4.204%. Investors worry that high inflation will limit the Federal Reserve's ability to ease monetary policy.

The news was particularly jarring for Japan, a major oil and gas importer.

Adding to market jitters, Iran has reportedly named Mojtaba Khamenei as successor to Supreme Leader Ali Khamenei, signaling a continuation of hardline policies in Tehran. This development follows a week of escalating tensions with the United States and Israel, a situation that is unlikely to be welcomed by Washington.

With no end in sight to hostilities in the Middle East and continued reluctance of tankers to transit the Strait of Hormuz, investors are bracing for a prolonged period of high energy costs.

Investors sought the liquidity of the dollar, shunning currencies of energy-importing nations like Japan and Europe. The dollar rose 0.6% against the yen to 158.72, while the euro fell 0.8% to $1.1525.

Bucking expectations, gold fell 1.8% to $5075 an ounce, with analysts suggesting investors were taking profits to cover losses in other markets.

"We are facing the worst supply shock in the oil market since the 1970s, and all eyes are on Washington's response," said Helima Croft, head of global commodity strategy at RBC Capital Markets.

"So far, neither the White House's political prescriptions nor optimistic television statements have alleviated the acute market anxiety about regional shipping disruptions," Croft added.