UOB Global Economics & Markets Research highlights a sharp jump in Brent crude after US-Israel strikes on Iran and an OPEC+ decision to raise output. The bank notes Brent has already traded above USD 80/bbl in Asia and warns that a sustained move above last June’s USD 80 peak could spur renewed risk aversion, weighing on Asian equities and regional currencies.

War escalation and OPEC+ lift Brent

"The outbreak of war in middle east following the US-Israel strikes on Iran, sent oil prices markedly higher."

"On Sun (1 Mar), Brent crude spiked higher by 10% to US$80/bbl while analysts warned that it could climb as high as US$100 after the US-Israel military strikes on Iran plunged Middle East into a new war."

"Subsequently, in the scheduled OPEC+ meeting on Sun (1 Mar), the group led by Saudi Arabia and Russia decided to raise their oil output by 206,000 barrels in Apr (slightly accelerated pace of increase versus the 137,000 barrels increase made in Dec)"

"This morning, Brent crude opened its Asia trade with a 12% jump above US$81 opening price, and it is currently trading at US$79.39 (up US$ 6.52, or 8.9%), as of 7:30am SGT."

"All eyes are now on crude oil price and how high it will trade after the dramatic escalation of tensions in Iran and across the Middle East across the weekend."

"Should Brent crude oil trade above last June’s high of USD 80 / bbl, it may trigger renewed risk aversion which will be negative for Asian regional equities as well as currencies."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)