Oil prices jump after Iranian missile attacks on Israel in Middle East crisis – business live
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Oil prices rose on Wednesday morning as investors around the world weighed the risk of threats to energy supplies after Iran’s missile attack on Israel threatened to escalate the Middle East conflict.
The price of Brent crude oil futures, the North Sea benchmark, rose by 1.6% to $74.75, while the price of futures for its North American counterpart, West Texas Intermediate, rose by 1.7% to $70.98.
Prices surged on Tuesday as reports of Iran’s imminent attack emerged. The attack was a response to Israel’s killing last week of Sayyed Hassan Nasrallah, the leader of Lebanon’s powerful militant group, Hezbollah. Hezbollah is widely seen as an Iranian proxy, and Israeli troops have moved into Lebanon.
Brent crude prices rose by 3.8%, after the largest intra-day move since April 2023, according to analysts led by Jim Reid at Deutsche Bank. They wrote:
There were some indications that escalation risks might be higher this time around. The Pentagon said that this attack used around twice as many ballistic missiles as the one in April, while Iranian commentary was more ambiguous on whether the attack would be one-off.
Most Asian stock markets outside China slumped on Wednesday morning, following the lead of US indices the night before. Japan’s Nikkei slumped by 2.2%, South Korea’s Kospi fell by 0.6%, and Australia’s ASX 200 index fell by 0.1%.
However, Hong Kong’s stock market soared by 6% amid Beijing’s stimulus, which has pushed up Chinese stocks. The mainland Chinese stock markets were closed for the Golden Week holiday.
Investors are now considering whether Israel will respond directly to Iran, while Israeli forces continued to strike Beirut, Lebanon’s capital. Israel has also been fighting in Gaza, to its west, for almost a year after the attacks by Hamas on 7 October.
Mohit Kumar, chief economist for Europe at Jefferies, an investment bank, said:
Risk off dominated the markets on escalation in the Middle East. Oil moved higher on geopolitical risks. Markets did stabilise after the initial risk off and investors now wait for the response from Israel.
The agenda
10am BST: Eurozone unemployment rate (August; previous: 6.4%; consensus: 6.4%)
1:15pm BST: US ADP employment change (September; prev.: 99,000; cons.: 120,000)