TEHRAN: Global oil prices held above $100 on Friday, while most equity markets fell, after Iran’s new leader, Ayatollah Mojtaba Khamenei, called for blocking the strategic Strait of Hormuz and opening new fronts in the war against the United States and Israel.
The conflict, now entering its third week, has sparked fears of prolonged disruption, with investors concerned about inflation and a broader global economic slowdown.
This week, Iran has targeted energy infrastructure across the Gulf, including attacks on ships near Iraq, fuel tanks in Bahrain, and drones fired at Saudi oil fields. Tehran warned that any targeting of its own energy facilities would lead to the region’s oil and gas “being set on fire.”
Khamenei, in his first public comments since succeeding his father, emphasized that the Strait of Hormuz, a critical passage for about 20% of the world’s oil and gas, must remain effectively closed. He also noted that new, vulnerable fronts could be activated if the conflict continues.
Crude prices surged over 9% on Thursday, with Brent crude exceeding $100 per barrel for the first time since Russia’s 2022 invasion of Ukraine. Brent has risen roughly 40% since the Middle East war began on February 28. Analysts noted that even the record release of 400 million barrels from International Energy Agency (IEA) stockpiles had minimal impact. The IEA called this conflict “the largest supply disruption in the history of the global oil market.”
Meanwhile, former U.S. President Donald Trump faced political scrutiny as the economic fallout intensified. In a social media post, he highlighted the U.S.’s status as the world’s largest oil producer while stressing his priority of preventing Iran from obtaining nuclear weapons.
Market analysts say the continued high crude prices are pushing equity traders to reduce exposure, particularly in energy-importing Asian markets.
Market Snapshot (around 0700 GMT):
- West Texas Intermediate: $95.50 (-0.2%)
- Brent Crude: $100.56 (+0.1%)
- Tokyo Nikkei 225: 53,819.61 (-1.2%)
- Hong Kong Hang Seng Index: 25,477.39 (-0.9%)
- Shanghai Composite: 4,095.45 (-0.8%)
- New York Dow: 46,677.85 (-1.6%)
- London FTSE 100: 10,305.15 (-0.5%)
Currency markets showed the U.S. dollar holding gains due to its safe-haven status, while other major currencies weakened slightly.
Market observers warn that unless progress is made toward a ceasefire, elevated oil prices, higher interest rates, and equity market pressure are likely to continue in the coming weeks.
Comment