Share markets nosedived in Asia on Monday as the inflationary jolt from surging oil prices threatened to raise living costs and interest rates across the globe, while investors desperate for liquidity fled to the U.S. dollar.
Brent crude soared 27% to $117.58 a barrel, the biggest daily gain since at least 1988, which came on top of a 28% rise last week. U.S. crude shot up a staggering 28% to $116.51, promising to push petrol prices quickly skyward.
Iran named Mojtaba Khamenei to succeed his father Ali Khamenei as supreme leader, signalling that hardliners remained firmly in charge in Tehran a week into its conflict with the U.S. and Israel.
That was unlikely to be welcomed by U.S. President Donald Trump, who had declared the son "unacceptable."
With no sign of an end to hostilities in the Middle East and tankers still not daring to cross the Strait of Hormuz, investors were bracing for a long stretch of higher energy costs.
"Faced with the worst oil supply shock since the 1970s, all eyes will be on Washington’s response," said Helima Croft, head of global commodity strategy at RBC Capital Markets. "With no clear definition of what winning looks like, it is hard to forecast whether this will be a multi-week or multi-month conflict."
"To date, neither White House policy prescriptions nor upbeat television soundbites have alleviated acute market anxiety about the shipping standstill and cascading shut-ins across the region."
Source : investing.com