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Oil and gas prices surged on Monday as the widening conflict in the Middle East disrupted supplies from the region.
In the first trading session since the US and Israel launched air strikes against Iran on Saturday, Brent crude, the international benchmark, soared as much as 13 per cent to $82.37.
European gas prices soared 24 per cent at the start of trading.
Activity in the Strait of Hormuz, the narrow waterway at the mouth of the Gulf through which a fifth of the world’s oil and gas flows, has slowed to a near standstill following the strikes.
Qatar and the United Arab Emirates produce roughly a fifth of global liquefied natural gas, and typically export to Asia and Europe through the Strait.
Tehran’s retaliatory strikes on its Gulf neighbours also threaten regional infrastructure critical to the global energy market.
“The implications of this conflict for the world economy depend on the flow of oil and gas through the Strait of Hormuz,” said Norbert Rücker, head of economics at Julius Baer. “The most feared scenario is not its closure, but serious damage to the region’s key oil and gas infrastructure.”
Brent crude gave up some of its earlier gains to trade up 8 per cent in London.
Gold prices rose 1.6 per cent to $5,362 a troy ounce, as investors sought haven assets. The dollar rose 0.6 per cent against a basket of its key trading partners.
Futures tracking the S&P 500 indicated the index would drop 1.1 per cent when Wall Street reopens on Monday.
Stock markets across Asia declined on Monday with Japan’s Topix and Hong Kong’s Hang Seng down 1.5 per cent and 1.4 per cent respectively.
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