Energy stocks gain as Middle East crisis threatens Iranian oil supply
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The news: Oil and gas majors surged at market open on the ASX after oil prices rose on fears that the escalating conflict in the Middle East may disrupt Iranian production.
The numbers: Karoon Energy (7.2%), Beach Energy (4.4%), Santos (2.6%) and Woodside Energy (2.5%) made up four of the top five performing stocks across the ASX 200 by 10:45am AEST.
Energy, adding 2.08%. was the best performing sector as the wider market edged down 0.07%.
Brent futures rose 1.4% to USD74.40 ($108.09) a barrel, while US West Texas Intermediate crude gained 93 US cents, or 1.35% to USD70.77. Both benchmarks jumped more than 5% over night.
The context: Oil prices climbed after Iran fired more than 100 ballistic missiles at Israel on Wednesday morning AEST, in retaliation for the assassinations of Hezbollah leader Hassan Nasrallah, Hamas political leader Ismail Haniyeh, and an Iranian commander.
Iran is a member of the Organization of the Petroleum Exporting Countries (OPEC) and a major oil producer in the region. A panel of ministers from the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, will meet later today to review the market, Reuters reported.
What they said: "A major escalation by Iran risks bringing the US into the war," Capital Economics said in a note, reported by Reuters.
"Iran accounts for about 4% of global oil output, but an important consideration will be whether Saudi Arabia increases production if Iranian supplies were disrupted," it said.
The source: Reuters
