Oil soars 25pc, gold drops as Iran war jolts global commodity markets

Oil prices surged around 25 per cent on Monday to their highest since mid-2022, with Brent on track ‌for a record one-day gain, while gold fell 2pc as an escalating Iran war squeezed world energy supplies, boosted the dollar and dampened hopes of interest-rate cuts.

Agriculture markets, led by edible oils, rose as they took their cue from oil prices due to the extensive use ​of vegetable oils in making biofuels. Aluminium firmed on supply worries even as other metals faced headwinds from ​a stronger dollar.

“The violent reaction stems from the markets seeing no obvious offramp in the escalating ⁠Middle East conflict, now a high-stakes standoff where neither side appears willing to blink first,” Tony Sycamore, IG market ​analyst, said in a note.

“The risk of more lasting economic damage continues to build by the day.”

Iran on Monday named Mojtaba Khamenei ​to succeed his father, Ali Khamenei as Supreme Leader.

Soaring oil lift vegoils, grains

Brent was on track for its biggest one-day gain ever in both percentage and ​absolute terms as the expanding US-Israeli war with Iran led some major Middle Eastern oil producers to cut supplies, and ​on fears of prolonged disruption to shipping through the Strait of Hormuz chokepoint.

Brent crude futures climbed to a high of $119.50 per barrel ‌, and US ⁠West Texas Intermediate (WTI) to $119.48 a barrel.

“…the situation appears to be deteriorating further,” ING analysts said........

© Dawn Business