🛢🌏 Oil Prices Jump, Asian Markets Plunge As Middle East Crisis Escalates
🌐 Market participants are expecting more price gains amid mounting fears that Iran may retaliate against the US with the closure of the Strait of Hormuz -- which sees around a quarter of global oil trade and 20 per cent of liquefied natural gas supplies.
Asian markets plunged while oil prices briefly hit five-month highs on Monday amid concerns of disruption to energy markets after the United States joined Israel in attacking Iran's nuclear facilities, escalating the Middle East crisis. Iran is the world's ninth-biggest oil-producing country, with an output of about 3.3 million barrels per day.
Oil prices were up over 2 per cent, their highest since January. Brent was up a relatively restrained 2.7 per cent at $79.12 a barrel, while US crude rose 2.8 per cent to $75.98.
Asian stocks were also lower as traders digested the weekend's events, as investors anxiously awaited Tehran's retaliation to US attacks on Iranian nuclear sites. Iran has threatened US bases in the Middle East as fears grow of an escalating conflict in the volatile region.
Tehran exports almost half of that amount and keeps the rest for domestic consumption. And if Tehran decides to retaliate, observers say one of its options would be to seek to close the strategic Strait of Hormuz -- which carries one-fifth of global oil output.
🔸️Selective disruptions that scare off oil tankers make more sense than closing the Strait of Hormuz given Iran's oil exports would be shut down too," Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia told Reuters.
🔹️In a scenario where Iran selectively disrupts shipping through the Strait of Hormuz, we see Brent oil reaching at least $100/bbl