JAKARTA - World oil prices jumped and stock markets were pressured on Monday, after intense attacks by the United States and Israel on Iran triggered concerns about disruptions to global energy supplies.
As reported by The Guardian, Monday, March 2, Brent crude jumped as much as 13 percent at the start of trading, hitting $82 per barrel amid concerns over the effective closure of the Strait of Hormuz, one of the most vital shipping routes. This figure is the highest in the last 14 months.
Meanwhile, direct pressure was also felt on the exchange. In Tokyo, the Nikkei 225 fell nearly 2.4 percent before cutting its losses to around 1.5 percent.
Pre-market indications also put Wall Street on track to open lower. In Sydney, the ASX 200 had a sharp drop before recovering, but was still down about 0.4 percent. In Shanghai, the CSI 300 weakened 0.6 percent.
Not only the exchange, the price of gold is also observed to strengthen. It is known that the price of gold rose 2.8 percent to 5,397.10 US dollars per ounce, reflecting the increased caution of investors.
Meanwhile, the military escalation has not shown any signs of easing. Donald Trump stated that the conflict could last up to four weeks and the attacks would continue until the US goal was achieved. Although oil prices have fallen slightly from their initial peak, Brent is still up 4 percent at the start of trading.
The main focus is on the Strait of Hormuz, through which about a fifth of oil supplies and gas tankers pass. Hours after the attack on Saturday, Tehran reportedly warned tanker ships that no ships would be allowed to pass. United Kingdom Maritime Trade Operations (UKMTO) also reported that two ships were reportedly attacked.
The International Maritime Organization (IMO) urged ships to avoid the Strait of Hormuz.
"I urge all shipping companies to implement maximum caution," said IMO Secretary-General Arsenio Dominguez as reported by The Guardian.
Maersk said it was suspending shipping through the Strait of Hormuz and the Suez Canal on safety grounds. At the same time, Opec+ agreed to a moderate production increase of 206,000 barrels per day for April - but that supply still had to leave the Middle East by tanker. Iran itself accounts for 4.5 per cent of global supplies, so its disruption of shipments could potentially shake the wider market.
"The most immediate and tangible development affecting the oil market is the effective cessation of traffic through the Strait of Hormuz, which prevents 15 million barrels per day of crude oil from reaching the market," Rystad Energy's Jorge León told The Guardian.
"Unless a signal of de-escalation emerges soon, we expect oil prices to be reassessed significantly higher," he continued.
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