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NDTV
11 hours ago
- Business
- NDTV
How Israel-Iran Conflict May Affect Oil Prices In India
Israel's surprise airstrikes on Iranian nuclear sites have rattled global energy markets, sending oil prices soaring amid concerns that supplies from the critical West Asia region would be disrupted. The price of benchmark Brent crude surged by over $6 to cross a five-month high of $78 per barrel on Saturday. Higher crude prices mean higher fuel costs and an increase in the cost of freight. The potential negative ramifications for global trade resulted in a sharp fall in US equities too. Iran's airstrikes on Tel Aviv only served to heighten tensions further. Experts anticipate the rise in global tensions to lead to near-term volatility. In fact, the Volatility Index or the VIX, spiked nearly 8% in trade on Friday. While the escalation is bullish for near-term oil and gas prices, analysts at S&P Global Commodity Insights say it is unlikely to sustain price pressure unless it directly disrupts oil exports. "The attack is obviously bullish near term for oil prices, but the key is whether oil exports will be affected. When Iran and Israel exchanged attacks last time, prices spiked, then fell once it was clear the situation wasn't escalating and oil supply was unaffected," Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights, told news agency ANI. Even though India does not directly import large volumes of oil from Iran, it does import about 80 per cent of its oil requirement. The worry for India is that the Strait of Hormuz, which is located between Iran to the north and the Arabian Peninsula to the south, remains a critical chokepoint, with nearly 20 per cent of global LNG trade and a significant portion of crude exports transiting through the narrow waterway. Any disruption around the Strait of Hormuz, say analysts, may affect oil shipments from Iraq, Saudi Arabia, and the UAE, who are key suppliers for India. Analysts further said any disruption on the route could hurt India's exports in terms of time as well as costs. In the past, Iran has warned of blocking the key route. "There is a risk to LNG supply if Iran retaliates by threatening shipping through the Strait of Hormuz," as per analysts from S&P Global Commodity Insights. While current freight rates for Red Sea transits have remained steady, analysts say heightened conflict could reverse that trend. "Price risk premiums tend to fade unless actual supply is disrupted," said S&P analysts. The longer-term impact on oil and gas markets will depend on whether the conflict escalates into a regional war or remains contained. With OPEC+ announcing another higher-than-expected production hike in July, fundamentally oil markets remain well supplied and further Iranian supply cuts can be accommodated, the Emkay Global, a financial services provider, report states. "Our Energy team maintains a positive view on India's oil market companies on the back of strong marketing margins and core GRMs (gross refining margins) also holding up to $75/bbl Brent for the remaining part of the year. Our estimates don't see downside risks," the report added. For now, markets remain on edge, with every new development carrying the potential to tip the balance.
India Today
a day ago
- Business
- India Today
Oil jumps 7%, US stocks fall on fears of wider Iran-Israel war
NEW YORK (AP) — Oil prices leaped, and stocks slumped Friday on worries that escalating violence following Israel's attack on Iranian nuclear and military targets could damage the flow of crude around the world, along with the global S&P 500 sank 1.1% and wiped out what had been a modest gain for the week. The Dow Jones Industrial Average dropped 769 points, or 1.8%, and the Nasdaq composite lost 1.3%.advertisementThe strongest action was in the oil market, where the price of a barrel of benchmark US crude jumped 7.3% to $72.98. Brent crude, the international standard, rose 7% to $74.23 for a barrel. Iran is one of the world's major producers of oil, though sanctions by Western countries have limited its sales. If a wider war erupts, it could slow the flow of Iran's oil to its customers and keep the price of crude and gasoline higher for everyone the oil coming from Iran, analysts also pointed to the potential for disruptions in the Strait of Hormuz, a relatively narrow waterway off Iran's coast. Much of the world's oil that's been pulled from the ground moves through it on attacks involving Iran and Israel have seen prices for oil spike initially, only to fall later 'once it became clear that the situation was not escalating and there was no impact on oil supply,' according to Richard Joswick, head of near-term oil at S&P Global Commodity has Wall Street waiting to see what will come next. US stock prices dropped to their lowest points for the day after Iran launched ballistic missiles toward now, the price of oil has jumped, but it's still lower than it was earlier this year. 'This is an economic shock that nobody really needs, but it is one that seems more like a shock to sentiment than to the fundamentals of the economy,' said Brian Jacobsen, chief economist at Annex Wealth in turn sent US stocks to a loss that was notable in size but outside their top 15 for the year so that use a lot of fuel as part of their business and need their customers feeling confident enough to travel fell to some of the sharpest losses. Cruise operator Carnival dropped 4.9%. United Airlines sank 4.4%, and Norwegian Cruise Line Holdings fell 5%.They helped overshadow gains for US oil producers and other companies that could benefit from increased fighting between Israel and Mobil rose 2.2%, and ConocoPhillips gained 2.4% because the leaping price of crude portends bigger profits for that make weapons and defense equipment also rallied. Lockheed Martin, Northrop Grumman and RTX all rose more than 3%.advertisementThe price of gold climbed as investors searched for safer places to park their cash. An ounce of gold added 1.4%.Often, prices for Treasury bonds will likewise rise when investors are feeling nervous. That's because U.S. government bonds have historically been seen as some of the safest options around. But Treasury prices fell Friday, which in turn pushed up their yields, in part because of worries that a spike in oil prices could drive inflation has remained relatively tame recently, and it's near the Federal Reserve's target of 2%, but worries are high that it could be set to accelerate because of President Donald Trump's sent the yield on the 10-year Treasury up to 4.41% from 4.36% late Thursday. Higher yields can tug down on prices for stocks and other investments, while making it more expensive for US companies and households to borrow money.A better-than-expected report Friday on sentiment among U.S. consumers also helped drive yields higher. The preliminary report from the University of Michigan said sentiment improved for the first time in six months after Trump put many of his tariffs on pause, while U.S. consumers' expectations for coming inflation Wall Street, Adobe fell 5.3% even though the company behind Photoshop reported a stronger profit for the latest quarter than Wall Street expected. Analysts called it a solid performance but said investors may have been looking for some bigger revenue forecasts for the upcoming of Brazilian meat giant JBS fell 3.9% as they made their debut on the New York Stock Exchange. The company wants to increase access to its shares among global investors, despite criticism from environmental groups, U.S. lawmakers and others who noted JBS' record of corruption, monopolistic behavior and environmental told, the S&P 500 fell 68.29 points to 5,976.97. The Dow Jones Industrial Average dropped 769.83 to 42,197.79, and the Nasdaq composite sank 255.66 to 19, stock markets abroad, indexes slumped across Europe and Asia. France's CAC 40 lost 1%, and Germany's DAX dropped 1.1% for two of the larger Watch
Los Angeles Times
a day ago
- Business
- Los Angeles Times
Oil prices leap 7% and US stocks slump more than 1% on worries about the crude market
NEW YORK — Oil prices leaped, and stocks slumped Friday on worries that escalating violence following Israel's attack on Iranian nuclear and military targets could damage the flow of crude around the world, along with the global economy. The Standard & Poor's 500 sank 1.1% and wiped out what had been a modest gain for the week. The Dow Jones Industrial Average dropped 769 points, or 1.8%, and the Nasdaq composite lost 1.3%. The strongest action was in the oil market, where the price of a barrel of benchmark U.S. crude jumped 7.3% to $72.98. Brent crude, the international standard, rose 7% to $74.23 for a barrel. Iran is one of the world's major producers of oil, though sanctions by Western countries have limited its sales. If a wider war erupts, it could slow the flow of Iran's oil to its customers and keep the price of crude and gasoline higher for everyone worldwide. Beyond the oil coming from Iran, analysts also pointed to the potential for disruptions in the Strait of Hormuz, a relatively narrow waterway off Iran's coast. Much of the world's oil that's been pulled from the ground moves through it on ships. Past attacks involving Iran and Israel have seen prices for oil spike initially, only to fall later 'once it became clear that the situation was not escalating and there was no impact on oil supply,' according to Richard Joswick, head of near-term oil at S&P Global Commodity Insights. That has Wall Street waiting to see what will come next. U.S. stock prices dropped to their lowest points for the day after Iran launched ballistic missiles toward Israel. For now, the price of oil has jumped, but it's still lower than it was earlier this year. 'This is an economic shock that nobody really needs, but it is one that seems more like a shock to sentiment than to the fundamentals of the economy,' said Brian Jacobsen, chief economist at Annex Wealth Management. That in turn sent U.S. stocks to a loss that was notable in size but outside their top 15 for the year so far. Companies that use a lot of fuel as part of their business and need their customers feeling confident enough to travel fell to some of the sharpest losses. Cruise operator Carnival dropped 4.9%. United Airlines sank 4.4%, and Norwegian Cruise Line Holdings fell 5%. They helped overshadow gains for U.S. oil producers and other companies that could benefit from increased fighting between Israel and Iran. Exxon Mobil rose 2.2%, and ConocoPhillips gained 2.4% because the leaping price of crude portends bigger profits for them. Contractors that make weapons and defense equipment also rallied. Lockheed Martin, Northrop Grumman and RTX all rose more than 3%. The price of gold climbed as investors searched for safer places to park their cash. An ounce of gold added 1.4%. Often, prices for Treasury bonds will likewise rise when investors are feeling nervous. That's because U.S. government bonds have historically been seen as some of the safest options around. But Treasury prices fell Friday, which in turn pushed up their yields, in part because of worries that a spike in oil prices could drive inflation higher. Inflation has remained relatively tame recently, and it's near the Federal Reserve's target of 2%, but worries are high that it could be set to accelerate because of President Donald Trump's tariffs. That sent the yield on the 10-year Treasury up to 4.41% from 4.36% late Thursday. Higher yields can tug down on prices for stocks and other investments, while making it more expensive for U.S. companies and households to borrow money. A better-than-expected report Friday on sentiment among U.S. consumers also helped drive yields higher. The preliminary report from the University of Michigan said sentiment improved for the first time in six months after Trump put many of his tariffs on pause, while U.S. consumers' expectations for coming inflation eased. On Wall Street, Adobe fell 5.3% even though the company behind Photoshop reported a stronger profit for the latest quarter than Wall Street expected. Analysts called it a solid performance but said investors may have been looking for some bigger revenue forecasts for the upcoming year. Shares of Brazilian meat giant JBS fell 3.9% as they made their debut on the New York Stock Exchange. The company wants to increase access to its shares among global investors, despite criticism from environmental groups, U.S. lawmakers and others who noted JBS' record of corruption, monopolistic behavior and environmental destruction. All told, the S&P 500 fell 68.29 points to 5,976.97. The Dow Jones Industrial Average dropped 769.83 to 42,197.79, and the Nasdaq composite sank 255.66 to 19,406.83. In stock markets abroad, indexes slumped across Europe and Asia. France's CAC 40 lost 1%, and Germany's DAX dropped 1.1% for two of the larger losses. Choe, McHugh and Junzhe write for the Associated Press.
Global News
a day ago
- Business
- Global News
Oil prices leap amid worries about crude market due to Middle East conflict
Oil prices are leaping and stocks are falling Friday over worries that Israel's attack on Iranian nuclear and military targets could escalate further and damage the flow of crude around the world, along with the global economy. The price of a barrel of West Texas intermediate — the benchmark U.S. crude — jumped close to seven per cent on Friday morning to around US$72.65. Brent crude, the international standard, was also up around seven per cent to US$74.30 for a barrel. Western Canada select was selling at around $57.34 per barrel Friday morning. Iran is one of the world's major producers of oil, though sanctions by western countries have limited its sales. If a wider war erupts, it could slow the flow of Iran's oil to its customers and keep the price of crude and gasoline higher for everyone worldwide. Story continues below advertisement Beyond the oil coming from Iran, analysts also pointed to the potential for disruptions in the Strait of Hormuz, a relatively narrow waterway off Iran's coast, through which much of the world's oil moves on ships. View image in full screen Oil prices jumped on Friday on fears that a wider Middle East conflict could disrupt traffic in the Strait of Hormuz, through which much of the world's oil supply is shipped. File But past attacks involving Iran and Israel have seen prices for oil spike initially, only to fall later 'once it became clear that the situation was not escalating and there was no impact on oil supply,' according to Richard Joswick, head of near-term oil at S and P Global Commodity Insights. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy That has Wall Street waiting to see what will come next. For now, the price of oil has jumped, but it's still lower than it was earlier this year. 'This is an economic shock that nobody really needs, but it is one that seems more like a shock to sentiment than to the fundamentals of the economy,' said Brian Jacobsen, chief economist at Annex Wealth Management. Story continues below advertisement Global stock markets also dipped on news out of the Middle East, with the TSX, Canada's main stock index, off about 25 points to 26,590 at around noon eastern time. The Dow Jones Industrial Average was down about 400 points to 42,572.79 and the Nasdaq composite was off 100 points to 19,561. Shares in Exxon Mobil rose 1.5 per cent and ConocoPhillips gained 1.9 per cent because the leaping price of crude portends bigger profits for them. The Canadian dollar was up slightly to around 73.63 cents US. The price of gold also climbed about 1.5 per cent, to over US$3,400 and close to a record high as investors searched for safer places to park their cash. While sustained higher oil prices would likely lead to an increase in gasoline prices, they could be a blessing for Alberta's provincial budget, which was forecasting a $5.2-billion deficit on the expectation that oil prices would average about $68 per barrel. Each $1 increase in the price of oil is predicted to increase provincial government revenues by about $750 million. — with files from Reuters and Global News.
a day ago
- Business
Oil prices surge after Israel's strike on Iran
Oil surged, stocks fell and investors sought safety in the U.S. dollar and government bonds Friday after Israel struck Iranian nuclear and military targets in an attack that raised the risk of war between the two countries and broader instability in the Middle East. Futures for the S&P 500 fell 0.9 per cent before the opening bell, while futures for the Dow Jones Industrial Average were down one per cent. Nasdaq futures slid 1.1 per cent. U.S. benchmark crude oil rose by $4.73 US, or 6.9 per cent, to $72.77 per barrel, its biggest gain since the early days of Russia's attack on Ukraine more than three years ago. Brent crude, the international standard, climbed $4.58 to $73.94 per barrel, also the largest single-day jump since the Russian invasion. Oil prices are likely to rise in the short term but the key question is whether exports are affected, said Richard Joswick, head of near-term oil at S&P Global Commodity Insights. When Iran and Israel exchanged attacks previously, prices spiked initially but fell once it became clear that the situation was not escalating and there was no impact on oil supply, he wrote in an emailed analysis. Oil price risk premiums could rise sharply if Iran conducts broader retaliatory attacks, especially if on targets other than in Israel, Joswick said. China is the only customer for Iranian oil but could seek alternative supplies from Middle Eastern exporters and Russia, he said. Iran's oil trade is restricted by Western sanctions and import bans, and Israel exports only small amounts of oil and oil products. The yield on the 10-year Treasury fell to 4.35 per cent from 4.41 per cent late Wednesday and from roughly 4.80 per cent early this year. Treasury bonds and the dollar often rise when investors feel less inclined to take risks. Goldman Sachs, in a note on Friday, said while it has incorporated a higher geopolitical risk premium into its adjusted summer 2025 oil price outlook, it continues to assume no disruptions to Middle East oil supply after Israel's attacks on Iran. The key question now is whether this oil rally will last longer than the weekend or a week — our signal is that there is a lower probability of a full-blown war, and the oil price rally will likely encounter resistance, said Janiv Shah, analyst at Rystad. Fundamentals show nearly all Iranian exports going to China, so Chinese discounted purchases would be most at risk here. OPEC+ spare capacity can provide the stabilizing force, he added. In other markets, stocks dived and there was a rush to safe havens such as gold and the Swiss franc. An increase in oil prices would also dampen the outlook for the German economy, the economic institute DIW Berlin said on Friday. It is the only G7 nation that has recorded no economic growth for two consecutive years. The Associated Press with files from Reuters
