The recent military exchanges between Israeli and U.S. forces against Iran prompted a significant surge in oil prices, surpassing $114 per barrel as trading opened on Monday morning.
Brent crude reached $114.43, while West Texas Intermediate was valued at approximately $110.40, marking a dramatic increase from Friday’s closure, where both benchmarks had already exceeded $90 per barrel.
Attacks on oil infrastructure prompted Kuwait Petroleum Corporation to declare ‘force majeure,’ indicating an inability to fulfil orders due to attacks.
QatarEnergy issued a similar notice for its LNG deliveries earlier in the week, while Iraq announced a reduction in oil production.
Tadawul Up: Aramco Gains
Despite these disruptions, Saudi Arabia’s Tadawul closed over 2% higher on Monday, as investors speculate that ongoing disturbances in global energy supplies may favour Aramco.
Supply-side cutbacks, tied to physical supply-side disruptions, continue to fuel sustained price rises.
Sovereign Buffers
Analysts note that while UAE equities faced downward pressure, the region’s robust sovereign reserves provide some cushioning against the current volatility.
Moody’s Ratings indicated a “baseline scenario” of a short-lived conflict that could temporarily disrupt the Strait of Hormuz without major damage to critical energy infrastructure.
Aviation meanwhile remains severely impacted, with limited flights recorded in Bahrain and Qatar, and repatriation flights serving Abu Dhabi and Dubai in the UAE.
Forecasts suggest that escalated oil and gas prices could exert upward pressure on inflation and curtail economic growth in various markets, including the UK.
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