TEHRAN: Oil prices surged after Iran fired ballistic missiles against Israel sparking fears of a wider conflict in the Middle East that could disrupt oil supplies.
Brent crude – a key benchmark for oil prices internationally – rose more than 1% to $74.40 a barrel.
During trading on Tuesday, it jumped more than 5%.
Iran is the seventh largest oil producer in the world, according to the US Energy Information Administration, and the third-largest member of the Opec oil producers’ cartel.
Traders also fear any military escalation in the region could affect shipping through the Strait of Hormuz.
The shipping route – which lies between Oman and Iran – is key to the global oil trade with 20% of world’s supplies sailing through it.
Other Opec members Saudi Arabia, the UAE, Kuwait and Iraq also send most of the oil they export through the Strait. Meanwhile, Asia stocks sank on Wednesday, catching up with the sell-off on Wall Street after Iran’s ballistic missile strike on Israel provoked fears of a wider regional conflict. Investors flocked to safer assets, pushing U.S. Treasury bond yields down in Asian time, while gold hovered near an all-time high. The safe-haven dollar traded close to its strongest in three weeks versus the euro. Macroeconomics also buoyed the dollar, with a resilient U.S. job market arguing for a smaller Federal Reserve interest-rate cut in November, and euro zone inflation trends backing a European Central Bank easing this month. –Agencies
