The Oil prices are in view of the unforeseeable end of Iran War continued to rise sharply. Stock prices then fell significantly. US WTI oil rose in price by 27 percent to more than $115 per barrel (159 liters). The price of North Sea Brent rose 23 percent to $114.36 – the biggest daily increase since at least 1988.
Before the war began around a week ago, Brent cost around 73 US dollars. This is the price since then increased by more than 50 percent. The Oil price The last time it was above $100 per barrel was three and a half years ago.
US President Donald Trump described rising oil prices as a necessary sacrifice in view of the threat posed by Iran’s nuclear program. “Short-term oil prices, which will quickly fall once the destruction of Iran’s nuclear program is complete, are a very small price to pay for security and peace in the United States and around the world,” Trump wrote on his online service. “Only fools would think otherwise,” he added.
Stock markets in Asia collapsed this Monday amid fears of delivery bottlenecks, rising inflation and higher interest rates. The Japanese Nikkei index and the Kospi index in South Korea were down around seven percent. Airline securities in particular fell significantly in Asia: they lost between four and more than ten percent.
The German leading index Dax is also expected to be significantly weaker at the start of trading – futures contracts fell by more than three percent. On the US stock exchange, the S&P 500 future fell by around two percent.
In response to high oil prices, South Korea announced it would cap domestic fuel prices for the first time in almost 30 years. The government will “quickly and decisively implement” a system of maximum prices for petroleum products, President Lee Jae-myung said at an emergency Cabinet meeting.
The US and Israel’s war with the Irannow entering its second week, affects countries and regions critical to the production and transportation of oil and gas from the Persian Gulf. Around 15 million barrels of crude oil – about 20 percent of global oil trade – typically move through the Strait of Hormuz every day, according to independent research firm Rystad Energy.
Iraq and Kuwait are cutting back on oil production
The threat of Iranian missile and drone attacks has tankers largely prevented from passing through the strait. It borders Iran to the north and is used to transport oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran.
Iraq, Kuwait and the United Arab Emirates have reduced their oil production as storage tanks become increasingly full due to reduced export opportunities. At the end of last week, Qatar’s Energy Minister Saad al-Kaabi made plans serious consequences of the war in the Middle East for deliveries of energy raw materials warned from the region. It is feared that all producing states in the Persian Gulf could stop production within a few weeks. According to the minister’s assessment, an increase in the price of oil up to 150 US dollars is then possible.
Iran, Israel and the United States have attacked oil and gas facilities since the war began, further exacerbating supply fears. However, the USA asserted that it did not want to attack the Iranian oil industry. “The US is not targeting energy infrastructure,” Energy Secretary Chris Wright told CNN. The bombing of an oil depot by Israel in Iran had previously caused a stir, after which thick plumes of smoke filled the sky over the capital Tehran darkened. Footage after the attack on Saturday evening showed a large fireball.
You can read more about the current developments in the Iran war in our live blog.