Oil prices surged on Wednesday amid growing concerns about escalating tensions in the Middle East. Brent crude, the global benchmark, rose by nearly 2% to reach $74.88 per barrel, while WTI, the US benchmark, climbed 2% to $71.20. This increase followed a 2.5% gain for both benchmarks on Tuesday.
The region's rising tensions have dampened the optimistic mood that had been driving financial markets in recent days. Stephen Innes, managing partner at SPI Asset Management, noted that the situation could worsen significantly if Israel were to target Iran's oil production, potentially causing a major disruption in global markets.
Iran, a significant oil producer and member of OPEC, primarily exports its oil to China due to international sanctions. Analysts have warned that any reduction in Iran's oil exports could have a substantial impact on the global market.
The uncertainty surrounding the situation has not only affected oil prices but has also impacted global stocks and other commodities markets. With the exception of Hong Kong, most Asian share markets experienced declines on Wednesday following a sell-off on Wall Street. Gold, considered a safe-haven investment, was trading close to its recent all-time high.
