Oil prices up 7% on W Asia escalation

Oil prices are leaping, and stocks are weakening Friday on worries that Israel’s attack on Iranian nuclear and military targets could escalate further and damage the flow of crude around the world, along with the global economy.

The S&P 500 was down 0.7% in early trading. The Dow Jones Industrial Average was down 508 points, or 1.2%, as of 9:35 am Eastern time, and the Nasdaq composite was 0.8% lower.

The strongest action was in the oil market, where the price of a barrel of benchmark US crude jumped 7.1% to $72.88. Brent crude, the international standard, rose 7.2% to $74.32 for a barrel.

Iran is one of the world’s major producers of oil, though sanctions by Western countries have limited its sales. If a wider war erupts, it could slow the flow of Iran’s oil to its customers and keep the price of crude and gasoline higher for everyone worldwide.

But past attacks between Iran and Israel have seen prices for oil spike initially, only to fall later “once it became clear that the situation was not escalating and there was no impact on oil supply,” according to Richard Joswick, head of near-term oil at S&P Global Commodity Insights.

That has Wall Street waiting to see what will come next. For now, the price of oil has jumped, but only back to where it was earlier this year.

“This is an economic shock that nobody really needs, but it is one that seems more like a shock to sentiment than to the fundamentals of the economy,” said Brian Jacobsen, chief economist at Annex Wealth Management.

In the meantime, US stocks are falling to give back some of the big recent gains that had brought them back to the brink of their record. But the losses are so far generally more modest than they’ve often been this year, when worries about President Donald Trump’s tariffs have injected even more uncertainty into financial markets.

In India, equity benchmark indices Sensex and Nifty tumbled nearly 1 per cent.

Falling for the second day in a row, the 30-share BSE Sensex dived 573.38 points or 0.70 per cent to settle at 81,118.60. As many as 2,469 stocks declined while 1,516 advanced and 137 remained unchanged on the BSE.

The 50-share NSE Nifty dropped 169.60 points or 0.68 per cent to 24,718.60. On a weekly basis, the BSE benchmark tanked or 1.30 per cent, and the Nifty 1.13 per cent.

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