Israeli attack on Iran in the oil-rich Gulf region have triggered four major impacts on the world economy, already reeling from uncertainties of trade wars between major power centers including the U.S. China and Europe.
Fears of a full-blown war have left the world to contend with immediate impacts in four areas – soaring oil prices, declining stocks around the world, trade disruptions and a negative fallout for digital currencies like Bitcoin.
Oil prices jumped nearly 9% on Friday to nearly a multi-month high after Israel launched strikes on Iran’s nuclear and military facilities, igniting fears of a prolonged conflict and raising worries about a disruption in the Middle East oil supplies.
Reflecting a widespread concern over implications of the conflict, Brent crude futures rose by $6.19, or around 8.9%, to $75.55 a barrel, after hitting an intraday high of $78.50, the highest since January 27.
Similarly, West Texas Intermediate, also called American crude was up $6.22, or 9.1%, at $74.26 after hitting $77.62, its highest level since January 21.
U.S. stocks fell sharply lower on Friday amid fears of Israeli-Iran war following Israeli strikes on the oil producing country. The Dow Jones Industrial Average declined 506 points in early trade, the S&P 500 dropped 0.7%, while the tech Nasdaq Composite slumped 0.8% Friday morning.
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Friday’s upsurge, according to analysts, was the largest intraday moves for both contracts since 2022, after Russia’s invasion of Ukraine triggered an uptick in energy prices.
Although the National Iranian Oil Refining and Distribution Company said oil refining and storage facilities had not been damaged and continued to operate, there were still concerns around the supply routes.
A primary concern, according to Iranian media, was whether the latest developments would affect the Strait of Hormuz, the corridor to oil trade.
The latest reports suggest the Hormuz waterway has not been affected yet by the attacks because Tehran has not so far retaliated intensely.
Global trading trends reveal that a fifth of the world’s total oil consumption passes through the strait, or some 18 to 19 million barrels per day (bpd) of oil, condensate and fuel.
Analysts at consultancy Sparta Commodities say any significant crude supply disruptions could result in the sour crude grades being marginally priced out of refineries in favor of light sweets.
Spiraling implications of the conflict could see oil prices surge to $120-130 a barrel, nearly double their current base case forecast, according to JPMorgan analysts. That could happen in the case of worst eventuality like closure of the strait or reaction from major oil producing countries in the region.
Meanwhile, people are turning to safe havens such as gold and the Swiss franc.
As a result, gold climbed up to $3,444.06 per ounce, toward a record high of $3,500.05 from April.
https://viewsnews.brandbrilliance.org/world-bank-says-global-growth-to-slows-down-to-2-3-but-no-sign-of-recession/
World stock markets dipped soon after the Israeli aerial strikes on Iran.
Wall Street’s Dow Jones Industrial Average futures (YM=F) tumbled roughly 1.1% as investors lost their appetite for riskier assets. S&P 500 futures (ES=F) dropped 1%, while those attached to the tech-heavy Nasdaq 100 (NQ=F) dived 1.3%.
The biggest cryptocurrency (BTC-USD) sank as much as 3% against the dollar after the attack. It has pared losses slightly and is now down about 2% at around $104,800.
Other digital tokens also faced a beating, with ether (ETH-USD) pulling back almost 8% at one point.
Likewise, Bitcoin and other cryptocurrencies fell as the Israeli attack on Iran shook global markets. Both currencies, bitcoin and ether, held significant losses.
The largest digital asset slid as much as 3% on Friday morning in Singapore to dip below $103,000 before paring losses, according to data compiled by Bloomberg. Second-ranked Ether had at one point shed about 7.6% of its value.
“Crypto is reacting negatively to news of Israel strikes in Iran, in line with major risk assets,” said Caroline Meuron, co-founder of Orbit Markets, a provider of liquidity for crypto derivatives. “We expect to see technical support around $101,000, but geopolitical news will drive price action from here in the short-term.”
Asian markets sank late Thursday evening as an Israeli attack on Iran shook global markets, leading to widespread selloffs as investors sought safer assets.
In share trading, Tokyo’s Nikkei 225 fell 1.2% to 37,721.63 while the Kospi in Seoul edged 0.7% lower to 2,900.14.
Hong Kong’s Hang Seng retreated 0.4% to 23,929.62 and the Shanghai Composite Index lost 0.2% to 3,394.52.
https://viewsnews.brandbrilliance.org/us-says-its-not-involved-in-israeli-attack-warns-iran-against-targeting-american-interests/
Australia’s S&P/ASX 200 (^AXJO) drifted 0.3% lower to 8,540.80. South Asian markets especially those of India and Pakistan also had a blood bath.
Share prices at the Pakistan Stock Exchange (PSX) fell like nine pins on Friday amid Israeli attacks on Iran.
The PSX’s benchmark index plunged by 1949 points to close at 122,143. Former director of Pakistan Stock Exchange Amin Yousaf said that if tensions between Iran and Israel rise further then it will have negative impact on the PSX and that will automatically harm confidence of the investors.
Indian stock market’s Sensex index settled 573 points lower while Nifty also experienced declines.
Muhammad Luqman is Associate Editor at Views News Now. He writes on wide-ranging issues including economy, South Asia, the Middle East, agriculture, economy and innovation. Luqman has worked some of the leading news organizations and won acclaim for his original and research-based works.
