How has the war in Israel affected world markets?

Oil prices rose 5% after the attack on Israel by the Palestinian group Hamas threatened to inflame tensions in the Middle East, the source of about a third of the world’s oil.

According to Bloomberg, WTI oil traded around $86 per barrel as the military risk premium returned to the markets, and Brent traded at $87.

Although recent developments in Israel do not pose an immediate threat to oil flow, Tehran’s response could jeopardize the passage of ships through the Strait of Hormuz, a vital oil supply channel.

In addition, as Reuters writes, the growing geopolitical risk may lead to the purchase of assets such as gold and the dollar and potentially increase demand for US Treasury bonds. Gold price has already risen by 1.2%.

As a result of the conflict in Middle Eastern markets, stocks also began to fall. The region’s main stock indices lost 6.4% on Sunday, marking the biggest drop in Israel’s TA-35 stock index in three years.