US-Iran Conflict Escalation Triggers Market Volatility. International Oil Prices Surge, Gold Safe-Haven Demand Rises
TradingKey - On Monday, crude oil prices in Asian markets surged significantly as tensions in the Middle East continued to escalate following joint military strikes by the United States and Israel against Iran.
Global benchmark Brent crude jumped roughly 13% at the open, hitting an intraday high of $82 per barrel before narrowing its gains.
Market participants are widely concerned that a further widening of the conflict could disrupt Middle Eastern oil supply systems, particularly the safety of navigation through the Strait of Hormuz, a strategic global oil transit hub. As a vital artery for nearly 20% of global oil trade, any disruption to the security of the Strait of Hormuz would directly rattle the nerves of global energy markets.
International investment bank Goldman Sachs ( GS) noted in an analysis that if oil shipments through the Strait of Hormuz were to experience even a 50% disruption for one month, international oil prices would face a premium pressure of approximately $4 per barrel.
Tracing the origins of the conflict, after joint U.S.-Israeli forces launched military strikes against Iran on February 28, Iran immediately launched a large-scale counter-offensive. Hostilities have now spread across the Persian Gulf, and the situation in the Middle East is sliding toward a dangerous precipice. On March 1, U.S. President Trump publicly stated that the military operation against Iran is expected to last about four weeks.
Meanwhile, safe-haven capital has flocked to the gold ( XAUUSD) market, driving spot gold prices up by approximately 2% in a single day.
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