Michelle ThompsonOil prices saw a significant increase on Friday as Asian markets experienced a downturn, driven by global concerns over escalating tensions in the Middle East following reported explosions near the Iranian city of Isfahan.
During Asian morning trading hours, US crude futures surged by 2.1%, reaching $84.5 per barrel, while Brent crude, the global oil benchmark, rose by 2%.
Reports indicated that Israel conducted a strike inside Iran, according to a US official, raising fears of further conflict in the region. The Israeli military refrained from commenting on reports of explosions in Iran when approached by CNN. Prime Minister Benjamin Netanyahu previously stated that Israel would make its own decisions regarding responses to Iran’s recent airstrikes, initiated in retaliation for a suspected Israeli strike on its embassy compound in Syria.
Analysts from ANZ noted that the market has been tense since Iran’s missile and drone attack on Israel over the weekend. They emphasized that Israel’s reaction could impact whether oil supplies become threatened. Additionally, ongoing oil disruptions remained a concern, the analysts added.
Meanwhile, the United States announced the reinstatement of sanctions on Venezuela’s oil industry, potentially disrupting its exports. Mexico also announced a reduction in exports due to strong domestic demand earlier this month.
In response to the market volatility, gold prices surged as traders sought safe-haven assets, briefly reaching 1% higher during Asian trading hours, trading at $2,422.4 per ounce.
Conversely, the price of bitcoin dipped below $60,000 on Friday morning amid decreased appetite for risky assets. Although it recovered slightly to trade at $62,406 by Friday noon, it still experienced a 2% decrease from the previous session.
Across Asian stock markets, significant declines were observed. Japan’s Nikkei 225 fell by 2.6%, South Korea’s Kospi dropped by 2.3%, Hong Kong’s Hang Seng Index decreased by 1.3%, and China’s Shanghai Composite was down by 0.4%.
However, shares of oil suppliers defied the overall market trend and experienced gains. In Hong Kong, PetroChina, CNOOC, and Sinopec saw increases, while in Tokyo, refiner Cosmo Energy and energy giant Eneos Corp. witnessed gains. In Seoul, S-Oil Corp also saw a rise in its shares.
