Singapore, London (Business Desk): Rising tensions between the United States and Iran in the Middle East have started affecting global financial markets. Crude oil prices have reached their highest level in several months, while investors have become cautious due to increased selling pressure in stock markets around the world.
In the global market, Brent crude oil prices rose by nearly 4 percent to $87.33 per barrel, reaching a several-month high. Similarly, US West Texas Intermediate also increased by around 4 percent, reaching $82.09 per barrel.
Other major crude oil benchmarks also recorded gains, with Murban crude reaching $80.77 per barrel and WTI Midland rising to $81.81 per barrel.
Experts say that due to growing geopolitical risks in the region, investors increased purchases amid concerns that energy prices could rise further.
The impact of Middle East tensions was not limited to crude oil, as other energy products also became more expensive. Significant increases were recorded in US gasoline futures, Dutch natural gas, US natural gas, and Japan-Korea LNG prices.
Experts say the major concern among investors is the possibility that if the situation in the region worsens further, oil and gas supplies through the Strait of Hormuz could be affected, a route through which a large portion of the world’s energy supply passes.
The rise in energy prices also affected the confidence of global investors. In the United States, Wall Street opened with a negative trend, where the S&P 500, Nasdaq, and Dow Jones remained under pressure. In Europe, declines were also seen in the German and French stock markets, while the UK market received some support from shares of major oil companies.
Asian markets also remained under pressure, with stock exchanges in Japan, South Korea, and China affected, particularly shares of technology and semiconductor companies.
According to economists, if crude oil prices remain near $90 per barrel, oil-importing countries like Pakistan could face serious economic challenges. The situation may lead to an increase in the import bill, a higher current account deficit, pressure on the currency, and further inflation.