Oil prices surged around 25% on Monday to their highest since mid-2022, with Brent on track for a record one-day gain, while gold fell 2% 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, signalling that hardliners remain firmly in charge in Tehran a week into its conflict with the United States and Israel.
Brent was on track for its biggest one-day gain ever in both percentage and absolute terms as the expanding U.S.-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 U.S. West Texas Intermediate (WTI) to $119.48 a barrel.
