Oil prices soar amid us-israeli strikes on iran, global economy on edge
A barrage of US and Israeli missile strikes on Iran sent shockwaves through global markets on Monday, with oil prices surging to a 14-month high and stock markets plunging in Asia and Europe.
Fears of widespread economic disruption
The intense military operation, which showed no signs of abating, sparked concerns that the Strait of Hormuz, a critical waterway for oil shipments, could be effectively closed, disrupting flows of crude and potentially sending prices skyrocketing.
Oil futures jumped as much as 13% in early trading, with Brent crude hitting $82 per barrel, its highest level since 2019. The price gain reflected not only the immediate impact of the strikes but also fears that the crisis could escalate and prolong, leading to a prolonged supply crunch.
Stock markets in Tokyo, Sydney and London tumbled, with the Nikkei 225 in Japan dropping nearly 2.4% and the Australian ASX 200 falling 0.4% as traders reacted to the unfolding crisis. Gold, often seen as a safe-haven asset, surged 2.8% to $5,397.10 per ounce.
The United States and Israel had launched a series of airstrikes against Iranian targets, with President Donald Trump warning that the conflict could last for another four weeks. The strikes targeted key military sites and infrastructure, including a rocket production facility and a precision-guided munitions plant.
In the aftermath of the attacks, the UK Maritime Trade Operations, a British agency, reported that two ships had been attacked in the Strait of Hormuz, one off the coast of Oman and another near the United Arab Emirates. The incidents heightened concerns that the critical shipping lane could be threatened, potentially disrupting global oil supplies.
Maersk, the world's largest container shipping company, announced it was temporarily halting passage through the Strait of Hormuz and the Suez Canal, citing safety concerns. The move underscored the vulnerability of the global oil trade, as most of the cartel's crude output must be transported by tanker through sensitive regions.
Oil prices have been rising in recent months due to a combination of factors, including OPEC+ production cuts, growing demand, and geopolitical tensions. However, the rapid and significant spike seen on Monday demonstrated the heightened sensitivity of energy markets to potential disruptions and highlighted the potential for further price volatility in the coming weeks.