A decline was seen in the Future Asian stock market on Monday. The reason for this is that investors fear that the conflict in the Gulf region may last long. Due to this tension, oil prices are increasing rapidly. Due to this, the risk of rising inflation and economic recession in the world has also increased. Meanwhile, the price of crude oil has crossed $115. Let us know in this news why oil prices are increasing so much.
Experts say that Iran has control over the Strait of Hormuz. This route is very important for the supply of oil and gas in the world. If there is any disruption here, it could have a major impact on the global market. Experts believe that this conflict may continue till June. Due to the ban on this route, the prices of oil, gas, fertilizers, plastic, aluminum and ship-airplane fuel have increased. Apart from this, prices of food items, medicines and petrochemicals may also increase. This is a matter of greater concern for the countries of Asia, because they are heavily dependent on the Middle East for energy. Japan’s Nikkei index is showing signs of falling, while America’s stock market futures have also declined.
Oil prices increased
Brent crude has increased by 2.4% to $ 115 per barrel. This month it has increased by about 59%. At the same time, American crude oil has also crossed $102. JP Morgan’s expert has warned that if the Strait of Hormuz remains closed for a longer period, oil and gas prices may increase further. If this situation lasts for a month, oil can reach $ 150 per barrel. Due to the fear of increasing inflation, investors are now believing that the US Central Bank may increase interest rates instead of reducing them or may adopt a strict stance. This week, data related to retail sales, factory production and jobs will come in America, which will give an idea of the condition of the economy.
Danger of inflation in Europe
Inflation is expected to increase in Europe also. Inflation rate may increase from 1.9% to 2.7% in March. Due to energy crisis, expensive debt and increasing defense expenditure, economic pressure is increasing on governments. This has also affected the government bond market. The US dollar is strengthening because people consider it a safe investment. Besides, America also exports energy, due to which it is getting advantage compared to other countries. The Japanese Yen has weakened against the Dollar, while the Euro has also not strengthened much. The price of gold is almost stable because investors are more cautious now.
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