Uncertainty over the war in Iran and fear of escalation in the Middle East caused stock markets in the US, Europe and Asia to plummet, due to possible cuts in energy supplies at the beginning of the day. Brent crude oil reached US$119,50 per barrel, although it later quoted a US$107,80after attacks on civilian infrastructure in the Persian Gulf, while the dollar strengthened as a financial refuge. However, Wall Street regained ground and oil fell to US$90 after President Donald Trump stated that the conflict is “practically finished“.
During his speech with CBS, the president highlighted that the offensive is “very advanced” compared to the initial schedule and detailed the adversary’s situation: “They have no navy, no communications, no air force. Their missiles are dispersed. Their drones are being destroyed everywhere (…). They have nothing left in military terms.” Faced with the paralysis of oil traffic, the leader of the White House threatened to take control of the Strait of Hormuz and showed total disinterest towards the new supreme leader, Mojtaba Khamenei, about whom he declared: “I have no message for him. None, at all.”
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ENERGY HEALING: SPIRITUAL MIRACLE OR TRANSFORMATION PROCESS? | ASTROMOOD
Brent figures are unstable so far, hovering between $105 and $119 per barrel. Photo: France24
Gasoline prices rise in the US
Wall Street began the day with declines of more than 1% in its main indices due to the war conflict, but, after Trump’s announcement, the outcome changed: The Dow Jones gained 0.50%, the Nasdaq index advanced 1.38% and the expanded S&P 500 rose 0.83%. However, there is still uncertainty about the outlook for the coming days. According to Reuters, a critical situation could “force the Federal Reserve to maintain a tougher stance for longer” to control prices.
On the other hand, during the day, the national average price of regular gasoline reached US$3.32 per gallonwhile diesel rose to US$4.33 after a significant weekly rise. Given that WTI maintains high prices, analysts anticipate that the transfer to the pumps will continue in the coming days due to the usual gap between the wholesale and retail markets.
The North American currency appreciated against other currencies under its status as a safe haven asset. Simultaneously, Treasury yields rose on the assumption that a prolonged oil shock will boost inflation again. This set of economic factors—expensive crude oil and high rates—constrains financial conditions for American businesses and households in the near term.
The stock markets of Asia and Europe
For Asians, the blow was immediate in the places most dependent on energy imports. AP reported that Japan’s Nikkei 225 fell more than 5%, while South Korea activated an internal fuel cap after a drop of around 6% in the Kospi and a rapid depreciation of the won. In addition, sharp declines were recorded in the stock markets of Hong Kong, Shanghai, Taipei, Sydney, Singapore, Manila and Wellington.
Crude oil continues to be the central variable: Brent and West Texas Intermediate (WTI) they rose close to 30% in the Asian opening (the second started with US$119.48 per barrel, but fell to US$103 later)driven by production cuts in Iraq, Kuwait and Saudi Arabia, in addition to operational risk in Gulf shipping routes. In parallel, the Brent curve tightened to extreme levels of ‘backwardation’ (the inverted market)a sign of immediate shortages and a market willing to pay a much higher premium for barrels available now.
Brent had a similar figure to WTI per barrel at the start of Monday, March 9. Photo: Bloomberg Line
For Europeans, the shock combined the sale of shares, pressure on bonds and higher gas prices. Euronews and Reuters indicated that the Stoxx 600 fell around 1.8% and extended the worst weekly stretch in almost a year, with marked declines in Frankfurt (0.77%), Paris (0.98%), Madrid (0.89%), London (0.34%) and Milan (0.29%). At the same time, European gas futures soared again the cut of Qatari LNG and the lower global supplyin a continent that reaches this crisis with weakened storage inventories and a high dependence on imports.
West Texas Intermediate (WTI) started the day with an alarming figure of almost $120 per barrel. Photo: Bloomberg Line
Strategic reserves and value of gold
The option to release them remains available, although the G7 and the IEA maintain the consensus not to activate this mechanism immediately. According to Reuters, the bloc evaluated a coordinated response to use emergency inventories, but determined that there is no firm decision to use these resources “for now”. This safety network has a volume of more than 1,200 million barrels in public stocks, to which an additional 600 million are added under mandatory private custody.
Meanwhile, in the financial markets, the gold registered a decline of more than 1% until reaching close to US$5,080 per ounce. This movement responds to the strengthening of the dollar and an upward adjustment in interest rate expectations, factors that drive investors towards liquidity to the detriment of traditional refuges. This dynamic reflects a temporary preference for cash as external volatility redefines short-term capital strategies.
Global energy stability faces severe threats due to curtailed production and disruptions to maritime traffic across the Strait of Hormuz. The news agency warned that damaged infrastructure coupled with strained supply creates an environment where a new oil shock “cannot be ruled out” under current conditions.
Gas in Latin America
Volatility shook the region’s markets with a direct impact on regional stocks and currencies. According to Bloomberg Línea, the MSCI Latam index suffered its biggest daily collapse in 11 months, with critical declines in places in Peru, Brazil, Mexico and Chile. In parallel, the US dollar strengthened its position against local currencies in the face of an evident deterioration in global risk appetite.
This situation generates mixed effects between hydrocarbon exporting nations and those dependent on external supplies. Although the rise in the barrel benefits Brazilian and Colombian income, it also increases inflationary pressure and punishes industrial sectors. Reuters adds that the strength of the greenback aggravates the adjustment in emerging economies, as it “makes financing, imported energy and coverage more expensive.”
The energy sector faces an external shock due to the increase in gasoline prices and the Qatari logistics crisis. According to the news agency, the paralysis in Qatar’s dispatches “shot up the global prices of LNG (liquefied natural gas) in Europe and Asia”, a situation that threatens raise electricity generation costs in Latin America. In the absence of fiscal buffers, consumers assume the increase in diesel and other derivatives essential for the domestic economy.
The fall spread to the Latin American region. Photo: Bloomberg Line
This is how the dollar is going in South America
The intensification of the war conflict in the Middle East positions the dollar as a safe haven asset and weakens various currencies of the subcontinent. According to experts from Bloomberg Línea and Reuters, factors such as rising oil prices, global uncertainty and rising international rates strengthen the US currency against emerging markets.
- Peru: around S/3,48 – S/3,49 per dollar.
- Brazil: nearly 5.3 reais per dollar.
- Chile: nearly 920 Chilean pesos per dollar.
- Colombia: nearly 3,800 Colombian pesos per dollar.
- Argentina: around 1,200–1,400 Argentine pesos.
- Uruguay: approximately 38–40 Uruguayan pesos per dollar.
- Paraguay: around 6,500–7,000 guaraníes per dollar.
