ASIAN stock markets plunged Monday as oil prices soared 30 per cent on fears about supplies from the Middle East as the US-Israeli war against Iran continued into a second week with no sign of letting up. I n v e s t o r s , a l r e a d y spooked by concerns over extended tech valuations and the huge spending on AI, ran for the hills as crude rocketed to its highest level since the Russian invasion of Ukraine in 2022.
Fears grew that the Middle East conflict could last for some time after US President Donald Trump said only the “unconditional surrender” of Iran would end the war. He added at the weekend that the spike in prices was a “small price to pay” to eliminate Iran’s nuclear threat, reiterating the White House’s insistence that the rise is temporary.
Both main contracts, which had surged more than a quarter last week, spiked as Iran carried out retaliatory strikes against crude-producing Gulf nations. West Texas Intermediate and Brent both jumped around 30 per cent to hit peaks just short of $120 a barrel. European gas prices also soared 30 per cent on Monday. Since the beginning of the war, WTI is up more than 75 per cent and Brent more than 60 per cent.
However, the surge was pared after a Financial Times report said finance ministers from the Group of Seven industrialized nations would discuss tapping emergency reserves in coordination with the International Energy Agency. Attacks on oilfields were reported in southern Iraq and in the northern autonomous Kurdistan region, which forced a US-run oilfield to cease production, while the United Arab Emirates and Kuwait have started reducing output.
That came with maritime traffic in the Strait of Hormuz — through which a fifth of global crude and gas passes — halted since the war began on 28 February. The prospect of high energy prices for a sustained period has fanned fears of a fresh spike in inflation that could hit the global economy while preventing central banks from cutting interest rates to support growth.
AFP
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