- author, Mariko Oi
- role, business reporter
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Global oil and gold prices soared and stock prices fell after U.S. officials said an Israeli missile had struck Iran.
After an initial sharp move in Asia on Friday, the market reaction eased, with Brent crude rising about 1.7% to above $88 per barrel and gold hovering near $2,400 per ounce.
Following this news, the benchmark stock indexes of Japan, Hong Kong, and South Korea also fell.
Investors are closely monitoring Israel’s response to Iran’s drone and missile attacks on the country over the weekend.
They are concerned that worsening conflicts in the Middle East could disrupt oil supplies.
In the stock market, Tokyo’s Nikkei Stock Average was down about 2.5%, Hong Kong’s Hang Seng Index was down about 1.2%, and South Korea’s Kospi Index was down about 1.7%.
Fluctuations in oil prices can cause ripple effects around the world, as countries rely heavily on primary products used to produce fuels such as gasoline and diesel.
Fuel and energy prices have been a major driver of global cost of living increases over the past few years.
Gold is considered a safe investment during uncertain times.
Rising tensions in the Middle East have already affected shipping through the Strait of Hormuz between Oman and Iran.
It is an important transportation route through which approximately 20% of the world’s total oil supply passes.
Saudi Arabia, Iran, the UAE, Kuwait, and Iraq, members of the oil-producing cartel OPEC, send most of their oil exports through the strait.
According to the U.S. Energy Information Administration, Iran is the world’s seventh-largest oil producer and third-largest OPEC member.
Vandana Hari, an energy market expert at Vanda Insights, said the rise in oil prices is “a natural response to concerns that war between Israel and Iran could escalate again.”
“Recent events highlight the growing fragility and instability of the situation in the Middle East,” she added.
