Amazon data centers under attack, possible chip supply disruptions: Day 6 of the Iran war

The military phase of the renewed conflict between the US, Israel and Iran continues for the sixth day in a row. What is happening in the markets and what analysts say about it - we have collected the main things by March 5.

- Amazon's data center in Bahrain has become a target of Iran's Islamic Revolutionary Guard Corps because of the alleged connection of "the company with the U.S. military." This was reported by the Iranian state agency Fars in Telegram, writes CNBC. CNBC recalls that on Monday, March 2, Amazon's cloud computing division - Amazon Web Services (AWS) - reported that one of its facilities in Bahrain was damaged by an Iranian drone strike on March 1. Also damaged by Iranian attacks this week were two Amazon data centers in the UAE. According to the AWS status dashboard, all of these facilities are now down, CNBC notes. The direct strikes against them, Fars points out, were carried out "to identify their role in supporting the enemy's military and intelligence activities." Amazon declined to comment on the matter. In addition to structural damage, the company's data centers also suffered from power outages in the Middle East region and some flooding from fighting fires at the facilities. Against the backdrop of these incidents, AWS advised cloud customers to back up their data.

- South Korea has warned that the Iranian crisis could disrupt supplies of key materials for chip production. Kim Yong-bae, a lawmaker from South Korea's ruling party, said this after a meeting with managers of major Asian tech companies like Samsung Electronics, Reuters reports. "There is a suggestion that semiconductor production [in South Korea] could be disrupted if some of the key materials cannot be sourced from the Middle East region," he said at a briefing for reporters, explaining that South Korean firms purchase some key materials for chip production, such as helium (produced in Qatar, among other places, and needed to dissipate heat in the semiconductor manufacturing process), from the Middle East. Samsung declined to comment on the matter. SK Hynix, for its part, said that it has sufficient helium reserves and does not expect any disruptions in the procurement process.

- On March 5, natural gas prices in Europe resumed a sharp rise, Bloomberg writes: futures jumped by as much as 13%, although the day before they were falling at the moment by 16%. Markets were assessing the US administration's plan to ensure safe passage of tankers through the Strait of Hormuz- a narrow water passage off the coast of Iran, through which about 25% of all marine oil supplies and a significant part of LNG supplies pass. However, the US authorities have not yet provided any details on the matter. US Energy Secretary Chris Wright said the previous day that the US Navy would escort oil tankers through the Strait of Hormuz "as soon as practicable", but for now they are all focused on fighting. Traders are still putting serious disruptions in energy supplies around the world into prices, Bloomberg states. "There is no decision yet on the possibility of resuming shipping through the strait, so fears of LNG shortages are growing every day," said Arne Lohmann Rasmussen, chief analyst at Global Risk Management (quoted by Bloomberg).

- The Chinese government has ordered the country's largest oil refineries to suspend exports of diesel fuel and gasoline in connection with the escalation of the conflict in the Middle East, which disrupts oil supplies from one of the world's largest producing regions, Bloomberg writes, citing sources familiar with the situation. According to them, it is a verbal demand of representatives of the Chinese National Development and Reform Commission, the main economic body of the country. They demanded that the suspension of exports of oil products from China should begin immediately. Moreover, the matter concerns both the conclusion of new contracts and the cancelation of already agreed supplies, Bloomberg writes. Government quotas in China for fuel exports are regularly received by such companies as PetroChina, Sinopec, CNOOC and Sinochem, the agency points out. None of them responded to Bloomberg's requests for comment.

- In trading on March 5, Brent oil jumped to an intraday high of $84.74 per barrel, but then corrected slightly and at the time of publication is trading at $83.77 - an increase of almost 3% compared to the previous close. WTI is at $73.53 (up almost 2.5% from the close on March 4).

- India has resumed imports of Russian oil amid the conflict in the Middle East, Bloomberg found out. At least two shipments of Russian oil, which previously indicated East Asia as their destination, are now heading to India, according to ship tracking data, the agency noted. According to Kpler and Vortexa, two tankers carrying a total of about 1.4 million barrels of Urals Mark crude (produced in the Baltic and Black Seas) are expected to unload at Indian ports this week, Bloomberg wrote. Russian oil purchases in India have been significantly reduced in recent months amid sanctions pressure from Washington on New Delhi.

- Japanese refiners have asked the Japanese government to allow them to use oil from the country's strategic oil reserves as the crisis in the Middle East worsens, sources familiar with the situation told Bloomberg. Japan gets more than 90% of its oil from the Middle East region, making it vulnerable to a virtual blockage of shipping through the Strait of Hormuz, Bloomberg points out, noting that at least one Japanese refinery has canceled gasoline exports scheduled for March,

- The volatility of emerging market currencies for the first time since Ma last year exceeded the volatility of currencies of developed countries, Bloomberg writes. We are talking about the JPMorgan Emerging Markets Volatility Index: it rose above the similar index of the G7 countries on Tuesday, March 3, although over the past 209 days - the longest period in the history of observations - the currency market has seen the opposite dynamics, the agency notes."The volatility of emerging market currencies has been affected by escalating tensions in the Middle East, as well as the secondary effect of volatile performance of Asian stock exchanges like the Kospi," said Mingjie Wu, a currency trader at StoneX Financial. The volatility of emerging-market currencies against developed-market currencies should decline once tensions in the Middle East subside, he estimates. Nearly all emerging-market currencies fell against the U.S. dollar this week, helped by lower risk appetite in the market and a sharp rise in oil prices, Bloomberg notes."Oil is the key factor behind the weakening of emerging market currencies and the resulting recent increase in volatility," agrees BNY strategist Wee Kun Chong.

- South Korean stocks rebounded after the strongest drop a day earlier. On March 5, the Kospi index made its strongest intraday jump since October 2008, adding 12%, after it collapsed by the same amount on March 4. "To a large extent, this movement reflects the actions of technical traders (who make decisions primarily based on techanalysis. - Oninvest), who began to buy back the drawdown in stocks after the market collapsed nearly 20% from its peak in just a few days," explained Gerald Gan, chief investment officer at Singapore-based Reed Capital Partners (quoted by Bloomberg).

- Amid air travel disruptions and flight cancelations in the Middle East region, Asian airlines have become one of the most popular options for those leaving the Middle East in the wake of U.S. and Israeli strikes on Iran, Bloomberg writes. The large-scale closure of airspace over the region has effectively paralyzed the work of carriers such as Emirates and Qatar Airways, creating opportunities for their competitors that can operate flights between Europe and Asia. Against this backdrop, ticket prices for carriers such as Cathay Pacific Airways and Singapore Airlines have risen by hundreds of percent. For example, a one-way economy-class ticket on a Singapore Airlines flight from Heathrow to Singapore on March 5 is HK$66,767 (or about $8,540), up 900 percent from the price of similar tickets in late February, Bloomberg calculated. "Asian airlines may face a combination of higher ticket prices, higher cargo yields and modest market share gains in the short term," said Linus Benjamin Bauer, founder of consultancy BAA & Partners. However, it is essentially a matter of "redistributing passenger traffic rather than a structural rebalancing of global airline networks," he warned. In trading in Hong Kong, Cathay Pacific Airways securities added a little more than 2% on March 5, Singapore Airlines is growing in Singapore by 0.45%.

This article was AI-translated and verified by a human editor