OIL
Picnews
The US-Israel conflict with Iran is sending shockwaves through global markets, with oil prices surging to seven-month highs near $73 per barrel. The Strait of Hormuz, a critical waterway handling 20% of global oil flows, is under threat, sparking fears of supply disruptions.
The conflict has triggered a wave of volatility across global markets, with equities, currencies, and bonds swinging wildly. Safe-haven assets like gold and silver are rallying, while energy stocks are poised to benefit from higher oil prices.
Analysts predict oil prices could hit $100 per barrel if the conflict escalates, adding 0.6-0.7 percentage points to global inflation. The US, a net energy exporter, may benefit from higher oil prices, but the impact on global growth could be significant.
The OPEC+ alliance has announced plans to increase production by 206,000 barrels per day in April, but analysts warn this may offer limited relief if supply disruptions persist. The decision comes amid fears that disruptions to Gulf transit routes could outweigh incremental output increases.
The conflict’s impact extends beyond oil, with global trade and energy security at risk. India, which imports nearly 90% of its crude oil, is particularly vulnerable, with potential disruptions to oil imports and trade.
Iran’s threat to shut down the Strait of Hormuz has sent shipping insurance premiums soaring, with some vessels already rerouting to avoid the region. The situation is being closely watched by global markets, with investors bracing for further volatility.
The US dollar is facing mixed pressures, with safe-haven currencies like the Japanese yen and Swiss franc gaining strength. The Israeli shekel is also under pressure, given the country’s direct exposure to the conflict .
As the situation unfolds, investors are advised to keep a close eye on developments in the region.
