On Wednesday, September 9, as the conflict between the United States and Iran escalated in the Persian Gulf, crude oil prices surged by 3%, surpassing $100 per barrel, leading to a lower opening for the US stock market.
As of 8:29 AM Eastern Time on Wednesday, Brent crude oil futures rose by 3%, reaching $100.86 per barrel. This marked the first time since July that the international benchmark oil price surpassed the $100 mark. US West Texas Intermediate (WTI) crude oil futures also increased by 3% to $95.84 per barrel.
On Tuesday, the US military destroyed five Iranian oil tankers in retaliation for Iran’s attempted attack on a US warship. The US Central Command stated on Wednesday that the American warship successfully evaded the Iranian attack, and no US personnel were injured.
Since the outbreak of the US-Iran conflict, traders have been accustomed to oil prices hovering around $100, but this situation has not been seen for some time. Brent crude oil futures last touched $100 in July, then dropped to below $80 in early August. Wednesday’s surge led to a price increase of around $20 in just a few weeks.
Daan Struyven, Co-Head of Global Commodity Research at Goldman Sachs, mentioned in an interview with CNBC’s “Squawk Box Asia” that the US-Iran conflict has been ongoing for seven months, and with the escalation of attacks on shipping, the risk of oil prices surging above $120 per barrel is increasing.
Goldman Sachs’ basic forecast still suggests that as producers adapt to disruptive factors (including alternative shipping routes and eventually increasing pipeline capacity), exports from the Persian Gulf will gradually recover.
However, Struyven pointed out that the recent escalation in the situation has increased the likelihood of a “more bullish” scenario, where exports may not recover in the coming months due to continued attacks on oil tankers.
European natural gas prices also saw a significant increase this morning, rising nearly 4% and trading around €79 per megawatt-hour, potentially setting a new highest closing price since the end of 2022.
The US stock market opened lower, with the Dow Jones Industrial Average leading the decline once again. The Dow Jones fell by 300 points, a decrease of 0.6%. The S&P 500 index dropped by 0.3%, while the Nasdaq Composite Index declined by 0.5%.
Overseas stock markets are experiencing mixed movements.
US government bond yields also edged up slightly as traders await details from the US Treasury regarding the size of tomorrow’s long-term bond repurchase operations.