'Black Monday' in global markets: Brent oil soars; gold, silver, and stocks crash
On the 10th day of the war that began with US and Israeli attacks on Iran, energy lines and oil facilities continue to be targeted. With shipments through the Strait of Hormuz disrupted, Brent oil has climbed above 113 dollars; there is talk of a "200 dollar" concern in global markets. While Asian stock markets are experiencing sharp declines, retreats have also been observed in gold, silver, and cryptocurrencies. A "Black Monday" atmosphere has emerged in the markets on the first day of the week.
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As the conflicts that began with US and Israeli attacks on Iran continue into their 10th day, strikes on energy infrastructure in the Middle East are shaking the global oil market. The largely halted tanker traffic through the Strait of Hormuz and the targeting of oil facilities in the region have led to serious disruptions in production and exports.
These developments have brought about a sharp rise in oil prices.
With investors turning to cash due to increasing uncertainty and risk perception on the first trading day of the week, a "Black Monday" atmosphere has effectively formed in the markets. As selling pressure increases across many assets, screens have largely turned red.
SHARP RISE IN OIL PRICES
Oil prices, which started the week with a strong rally in Asian markets, have drawn attention. The barrel price of Brent oil rose by 27 percent, testing 119.50 dollars and approaching its highest levels in nearly four years.
US crude oil similarly rose sharply, heading toward the 119 dollar level with an increase of nearly 30 percent.
As of 06:20 TSI, while Brent oil was trading around 115 dollars, the barrel price of US crude oil also attempted to stabilize near the 114 dollar level.
SHARP DECLINE IN ASIAN STOCK MARKETS
Rising geopolitical risks have also caused strong sell-offs in Asian stock markets. Losses in Japan's Nikkei index and South Korea's Kospi index exceeded 7 percent. It was observed that investors across the region are rapidly moving away from risky assets.
CRISIS IN HORMUZ, DECLINE IN PRODUCTION
The lack of signs that the conflicts will end in the short term and the fact that tankers are still unable to pass through the Strait of Hormuz are fueling concerns regarding oil supply.
While oil facilities in the region have been targeted by successive drone and missile attacks in recent days, the Kuwait Petroleum Corporation declared "force majeure," temporarily suspending its production and shipment obligations. In Iraq, it was reported that oil production has fallen by approximately 60 percent.
"200 DOLLAR" WARNING
Following the US and Israeli attack targeting large fuel depots in Tehran, the Iranian Revolutionary Guard Corps issued a stern statement. The statement indicated that energy facilities in the region could be targeted and warned that oil prices could rise above 200 dollars.
WAVE OF SELLING IN EUROPE AND THE US
A weak start to the week is also expected in European markets. While declines approaching 3 percent in futures trading have drawn attention, the loss in the Euro Stoxx 600 index, considered the benchmark for European stock markets, reached 2.7 percent.
A similar picture is seen in US markets. While declines in futures trading have exceeded 2 percent, S&P 500 futures contracts were trading 2.1 percent lower as of 06:00 TSI.
RETREAT IN GOLD, SILVER, AND CRYPTOCURRENCIES
While the uncertainty created by disruptions in energy corridors has caused a shock in the markets, a notable decline has also occurred in gold prices, which are seen as a safe haven. Spot gold fell 2.25 percent in the morning hours to the 5,055 dollar level. In the domestic market, the price of gram gold retreated to around 7,170 TL.
While the spot price of silver fell to 83 dollars, the acceleration of the flight from risky assets also affected the cryptocurrency market. The price of Bitcoin retreated to the 66 thousand dollar level.
TRUMP'S OIL COMMENT
US President Donald Trump made a statement downplaying the rise in oil prices.
In a post on his social media account, Trump argued that prices would fall after Iran's nuclear threat is eliminated, describing the increase as "a small price to pay for the security of the US and the world."
SLIDING SCALE SYSTEM REACTIVATED IN TURKEY
Following the rapid rise in global oil prices, the sliding scale system (eşel mobil), which was previously implemented to limit fuel prices in Turkey, has been reactivated.
According to the system, 75 percent of the increase in fuel prices will be covered by the Special Consumption Tax, while the remaining 25 percent will be reflected as a price hike at the pump. With this step, it is aimed to reduce the potential pressure on inflation in particular.