Brent price soars 20%, stocks fall: what's happening in the markets

Oil prices rose sharply in early trading after the weekend, surpassing $100 a barrel for the first time since 2022 amid production cuts by major exporters in the Middle East.

Brent futures for May delivery rose by 20% to $111.04 per barrel. Futures for the U.S. Mark WTI oil soared 22% to $111.24.

U.S. stock futures, in turn, fell sharply. Futures on the blue-chip index Dow Jones were down 1.9%, on the S&P 500 and on the Nasdaq - by 1.6%.

Gold, traditionally considered a safe haven for investors, rose 0.1% to trade just above $5165 an ounce.

The market's main concern remains oil supply problems due to the war in the Middle East, which is in its second week and involves more than a dozen countries. After the start of hostilities on February 28, the Strait of Hormuz - a narrow sea corridor at the entrance to the Persian Gulf, through which usually passes a fifth of the world's oil reserves - was effectively closed. Against this backdrop, WTI rose by 36% last week, while the price of Brent rose by 30% - the sharpest increase in six years.

The closure of the strait has already forced exporters in the region to start cutting production. Iraq has cut production by about 60%. Over the weekend, the United Arab Emirates and Kuwait began to cut production. Due to the lack of free onshore storage facilities, other countries may be forced to follow suit, Bloomberg writes.

Saudi Arabia, which was forced to suspend operations at the country's largest refinery last week because of the attacks, is trying to divert oil to its ports on the Red Sea for delivery to the global market.

U.S. Energy Secretary Chris Wright told CNN in a March 8 interview that resuming tanker traffic through the Strait of Hormuz would "at worst take a few weeks, but not months."

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