C T Online Desk: 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.
Iran is the world’s ninth-biggest oil-producing country, with an 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% to hit their highest price since January.
They pared these gains, however, and later in the morning Brent was up 2.1% at $75.43 per barrel and WTI was 2.1% higher at $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 $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% at the break, with Hong Kong losing 0.4% and Shanghai flat. Seoul fell 0.7% and Sydney was 0.8% lower.
