US-Iran Tensions Boost Oil Prices and Gold, Asian Markets Fall
US officials reported that an Israeli missile struck Iran, causing global oil and gold prices to rise and shares to fall.
The market reaction eased with Brent crude oil up 1.7% to $88 a barrel and gold near $2,400 an ounce.
Benchmark indexes in Japan, Hong Kong, and South Korea also declined, with the Nikkei 225 down 2.5%, Hang Seng off 1.2%, and Kospi falling 1.7%.
Investors are worried about potential disruptions to oil supplies due to escalating tensions in the Middle East.
The text discusses the impact of oil price fluctuations on the global economy, specifically the role of oil in fuel and energy prices leading to higher living costs.
The text also mentions gold as a safe investment during uncertain times.
The text further highlights the significance of the Strait of Hormuz in the Middle East, as about 20% of the world's oil supply passes through it, making tensions in the region a potential disruption to global oil supply.
Major oil-producing countries, including members of OPEC, rely on this shipping route to export most of their oil.
Iran is the seventh largest oil producer globally and a key member of OPEC.
Recent tensions between Iran and Israel have caused oil prices to surge, according to energy market expert Vandana Hari.
She explained that this is a reaction to renewed fears of warfare between the two countries, highlighting the instability and volatility in the Middle East situation.