Financial markets worldwide have been thrown into turmoil following a decisive US-Israel military operation that eliminated Iranian Supreme Leader Ayatollah Ali Khamenei and numerous senior officials. The coordinated strikes, described by US President Donald Trump as “pre-emptive,” have triggered a dramatic 15.13% surge in oil prices to $US77.44 per barrel, with projections indicating potential spikes beyond $US100.
Australia’s ASX 200 index dropped 0.42% to 9,160.10 points by midday Monday, reflecting widespread investor anxiety over escalating Middle East tensions. The market decline was partially mitigated by a substantial 3.78% rally in energy stocks, which benefited from the crude price surge.
Analysts from Capital.com warn that markets had not priced in comprehensive strikes against Iran, drawing parallels to the initial market shock following Russia’s invasion of Ukraine, though noting Iran’s more limited integration into the global economy might moderate the ultimate economic impact.
The commodity shock extended beyond oil, with gold futures jumping 2% to a four-week high of $US5,200 per ounce and silver rallying 8% to $US112.03 per ounce. The Australian dollar simultaneously fell 1.1% to a four-day low of 70.36 US cents.
Energy experts from Wood Mackenzie highlight additional risks to global supply chains, predicting dramatic increases in tanker rates and insurance costs that would compound the inflationary pressure from elevated oil prices. Major net energy importers including Japan, China and India face particular vulnerability to sustained price increases.