Oil prices skyrocketed by over three percent in early Asian trading as reports surfaced of explosions in Iran, Syria, and Iraq, fueling concerns of heightened tensions in the Middle East.
West Texas Intermediate climbed 3.66 percent to $85.76, while Brent rose 3.44 percent to $90.11.
The surge follows unconfirmed reports of explosions in several Middle Eastern regions, including Iran, Syria, and Iraq. This comes after a recent missile attack on Israel by Iran, prompting warnings of retaliatory measures from Israeli officials.
Iran reportedly launched over 300 ballistic missiles and attack drones during the weekend, most of which were intercepted by air defenses. The attack was described by Iranian leaders as a response to a prior incident at an Iranian embassy building in Damascus, which they attributed to Israel.
The news rattled global markets, with crude oil briefly spiking as much as four percent amid concerns about potential disruptions to the region’s oil supply. Equities also experienced a downturn as fears of escalating conflict weighed on investor sentiment.
Despite initial market reactions, Iran downplayed the reported explosions, with Tasnim news agency asserting the safety of the Isfahan nuclear facility and denying any significant damage. The International Atomic Energy Agency also confirmed that the facility remained intact.
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However, market volatility persisted as traders assessed the implications of the escalating tensions. Stocks in Asia dipped, with Tokyo, Taipei, Hong Kong, Sydney, and other major markets experiencing losses. European markets also opened lower.
The yen strengthened against the dollar, and gold prices surged past $2,400 as investors sought safe-haven assets. Meanwhile, US Treasury yields edged higher.
The situation in the Middle East adds another layer of uncertainty for investors already grappling with economic data signaling robust growth. Concerns about the Federal Reserve’s stance on interest rates further weighed on market sentiment, with some officials indicating a less dovish outlook than previously anticipated.
As tensions continue to escalate in the region, market participants remain vigilant, monitoring developments closely for any potential impact on global energy markets and geopolitical stability.
