Write an article about
[TOKYO] Oil prices surged and Asian markets traded lower on Monday on concerns of disruption to energy markets after US air strikes on Iran’s nuclear facilities.
The dollar strengthened as traders assessed the weekend’s events, with Iran threatening US bases in the Middle East as fears grow of an escalating conflict in the volatile region.
Iran is the world’s ninth-biggest oil-producing country, with output of about 3.3 million barrels per day.
It exports just under half of that amount and keeps the rest for domestic consumption.
If Tehran decides to retaliate, observers say one of its options would be to seek to close the strategic Strait of Hormuz – which carries one-fifth of global oil output.
When trading opened on Monday, Brent and the main US crude contract WTI both jumped more than four per cent to hit their highest price since January.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
They pared these gains however and later in the morning Brent was up 2.1 per cent at US$75.43 per barrel and WTI was 2.1 per cent higher at US$78.64.
Economists at MUFG warned of “high uncertainty of the outcomes and duration of this war”, publishing a “scenario analysis” of an oil price increase of US$10 per barrel.
“An oil price shock would create a real negative impact on most Asian economies” as many are big net energy importers, they wrote, reflecting the market’s downbeat mood.
Tokyo’s key Nikkei index was down 0.6 per cent at the break, with Hong Kong losing 0.4 per cent and Shanghai flat. Seoul fell 0.7 per cent and Sydney was 0.8 per cent lower.
‘Extreme route’
The dollar’s value rose against other currencies but analysts questioned to what extent this would hold out.
“If the increase proves to be just a knee-jerk reaction to what is perceived as short-lived US involvement in the Middle-East conflict, the dollar’s downward path is likely to resume,” said Sebastian Boyd, markets live blog strategist at Bloomberg.
US Defence Secretary Pete Hegseth said Sunday that the strikes had “devastated the Iranian nuclear programme”, though some officials cautioned that the extent of the damage was unclear.
It comes after Israel launched a bombing campaign against Iran earlier this month.
Chris Weston at Pepperstone said Iran would be able to inflict economic damage on the world without taking the “extreme route” of trying to close the Strait of Hormuz.
“By planting enough belief that they could disrupt this key logistical channel, maritime costs could rise to the point that it would have a significant impact on the supply of crude and gas,” he wrote.
At the same time, “while Trump’s primary focus will be on the Middle East, headlines on trade negotiations could soon start to roll in and market anxieties could feasibly build”. AFP
in html format .Organize the content with appropriate headings and subheadings ( h2, h3, h4, h5, h6). Include conclusion section and FAQs section with Proper questions and answers at the end. do not include the title. it must return only article i dont want any extra information or introductory text with article e.g: ” Here is rewritten article:” or “Here is the rewritten content:”
