Oil prices surged on Friday as Asian markets faced significant losses, driven by concerns over increased conflict in the Middle East following reported explosions near the Iranian city of Isfahan. US crude futures jumped to $84.5 per barrel, while Brent crude, the global benchmark, rose by 2%. The situation was exacerbated by reports of an Israeli strike inside Iran, which could further escalate tensions in the region.
Israeli Prime Minister Benjamin Netanyahu stated that Israel would make its own decisions in responding to Iran’s recent airstrikes, which were largely intercepted. This comes after Iran launched an attack in retaliation for a suspected Israeli strike on its embassy compound in Syria. Analysts noted that the market has been on edge since the Iranian missile and drone attack on Israel and highlighted the potential impact on oil supplies. Ongoing disruptions in various oil-producing countries further added to market concerns.
The United States announced its intention to reinstate sanctions on Venezuela’s oil industry, potentially impacting its exports. Mexico also stated that it would reduce exports due to strong domestic demand. These developments, combined with the escalating tensions in the Middle East, have heightened uncertainty in the oil market. Gold prices also rose as traders sought safe-haven assets, reaching $2,422.4 per ounce during Asian trading hours.
The price of bitcoin experienced a drop below $60,000 as investors turned away from risky assets. Despite some recovery later in the day, the cryptocurrency remained down by 2% from the previous session. Stock markets across Asia saw significant declines, with Japan’s Nikkei 225 falling by 2.6%, South Korea’s Kospi losing 2.3%, and Hong Kong’s Hang Seng Index dropping by 1.3%. China’s Shanghai Composite also experienced a decline of 0.4%.
Despite the overall negative trend in the markets, shares of oil suppliers surged, reflecting the impact of rising oil prices. In Hong Kong, companies such as PetroChina, CNOOC, and Sinopec saw gains of 2.3%, 2.8%, and 1.3%, respectively. In Tokyo, refiner Cosmo Energy and energy giant Eneos Corp. saw increases of 1.5% and 0.7%, respectively. In Seoul, S-Oil Corp rose by 2.1%. This divergence in performance between oil suppliers and the broader market indicates the sector’s response to the geopolitical tensions driving oil prices higher.