Oil price spike likely following US strikes on Iran nuclear sites, investors say
The reaction in Middle East stock markets suggested investors were assuming a benign scenario, even as Iran intensified its missile attacks on Israel
A US attack on Iranian nuclear sites could push oil prices even higher and trigger a knee-jerk rush to safety, investors said, as they assessed how the latest escalation of tensions would ripple through the global economy.
The reaction in Middle East stock markets, which trade on Sunday, suggested investors were assuming a benign outcome, even as Iran intensified its missile attacks on Israel in response to the sudden, deep US involvement in the conflict.
US President Donald Trump called the attack “a spectacular military success” in a televised address to the nation and said Iran’s “key nuclear enrichment facilities have been completely and totally obliterated.” He said the US military could go after other targets in Iran if the country did not agree to peace.
Iran said it reserves all options to defend itself and warned of “everlasting consequences.” Speaking in Istanbul, Iran’s Foreign Minister Abbas Araqchi said Tehran was weighing its options for retaliation and would consider diplomacy only after carrying out its response.
Investors said they expected US involvement would cause a stock market sell-off and a possible bid for the dollar and other safe-haven assets when major markets reopen, but also said much uncertainty remained.
“I think the markets are going to be initially alarmed, and I think oil will open higher,” said Mark Spindel, chief investment officer at Potomac River Capital.
