The global oil supply and economic stability faced increased pressure when Israel conducted military attacks on Iranian nuclear facilities and military installations on Friday which led to a sharp rise in crude prices.
The U.S. benchmark crude price rose 6.2% to $72.22 per barrel and Brent prices increased 5.9% to $73.44. The market experienced a general decline after the escalation which caused the S&P 500 to drop 0.4% and the Dow Jones Industrial Average to decrease 403 points or 0.9%. The Nasdaq declined 0.5%.
The Western sanctions against Iran do not stop the country from maintaining its position as a major oil-producing nation. The energy market will experience additional instability if Iran’s exports decrease or if the Strait of Hormuz experiences disruptions because this waterway serves as a vital route for worldwide oil transportation.
The market showed reduced volatility during the day but investors will maintain their focus on geopolitical threats and rising energy expenses and their effects on inflation rates and economic growth.
