The spike in oil prices has already hit markets. The Asian stock exchange had to stop trading
Quotes on the night from Sunday to Monday American West Texas Intermediate crude oil temporarily increased by over 30%, reaching the level of USD 118.21. per barrel. In turn, Brent Crude oil prices rose by over 27%, also exceeding the level of $118. per barrel. These are the highest prices since July 2022.
Such a sharp increase in prices results from the further escalation of the conflict in the Middle East. One of its effects is the blockade of the Strait of Hormuz, which connects the Persian Gulf with the Indian Ocean and is a key point for the transport of crude oil extracted in Middle Eastern countries.
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Oil prices skyrocket. Asian markets are reacting
The largest declines were recorded in Japan. The main index of the Tokyo Stock Exchange, the Nikkei 225, fell by about 7%. IN South Korea's KOSPI index lost almost 6%. The scale of the sale was so large that… The Seoul Stock Exchange authorities had to activate emergency security mechanisms and briefly suspend tradingto calm down the market situation.
Decreases also occurred on other trading floors in the region. In Australia, the S&P/ASX 200 index lost nearly 4%. In China, the CSI 300 Index fell by about 2% and the Shanghai Composite Index fell by about 1.5%. In turn, in Hong Kong's Hang Seng Index lost about 3 percent at the opening.
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Oil transport problems and risks for the Asian industry
“Prices rose this morning on reports that Middle Eastern producers are cutting output as warehouses fill up quickly,” said Daniel Hynes, senior commodities strategist at ANZ Bank. The expert warned that closing oil wells in the Persian Gulf region could result in… even after the conflict ends, the return of supply to world markets will be delayed.
The Asia Nikkei portal also draws attention to the possible effects of the crisis on the industry. The Japanese refinery company Idemitsu Kosan warned its contractors against possible suspension of ethylene production due to lack of raw material.
Possible production limitation this chemical could disrupt supplies to the automotive and electronics industrieswhich use it to produce plastics and many industrial components.
