Business

Oil prices surge above $87 amid US-Iran tensions

Published by

Abdul khalique

9 minutes ago

NEW YORK: Oil prices rose above $87, nearly 4 percent, amid rising tensions between the US and Iran, while global stock markets fell.

The recent rise in oil prices could fuel inflation in Pakistan and further strain public finances, including the rupee.

Brent crude rose $3.10, or 3.68 percent, to $87.33 a barrel, its highest level in several months. On the other hand, US West Texas Intermediate crude oil prices jumped $3.14, or 3.98%, to $82.09 per barrel.

Murban crude oil rose 3.91% to $80.77 while WTI Midland rose 3.10% to $81.81 as traders bid up prices in the face of rapidly rising geopolitical risks.

The bullish trend spread across the energy complex, with US gasoline futures up 3.86% and Dutch TTF natural gas up 3.41%.

Similarly, US natural gas prices rose 1.01%, and the Japan-Korea LNG benchmark rose 0.92%. The increase was driven by concerns that the escalating hostilities could threaten oil and gas shipments through the Strait of Hormuz, a vital thoroughfare for about a fifth of global crude trade.

The sudden rise in oil prices sparked a cautious investment trend in global financial markets, with investors pulling money out of stocks and into traditional safe-haven assets.

Wall Street opened with a sell-off, with the S&P 500, Nasdaq Composite and Dow Jones Industrial Average all trading in negative territory, led by losses in technology and growth stocks.

Since Pakistan is heavily dependent on imported petroleum, sustained crude prices near $90 a barrel could increase the import bill, widen the current account deficit, accelerate inflation, and further strain public finances, including the rupee.

Analysts say markets are likely to remain volatile until there is more clarity on whether the dispute remains contained or escalates into a wider regional conflict.

Any disruption to oil exports from the Gulf or shipping through the Strait of Hormuz could push crude prices higher, adding to global inflationary pressures and further weighing on financial markets.

Abdul khalique