Market Commentary: Friday 13th March

Global stock markets stabilised slightly after a sharp selloff as oil prices steadied around $100 per barrel.

Investors remain cautious as tensions escalate between the US and Iran, particularly after Iran signalled it may keep the Strait of Hormuz effectively closed, threatening global energy supply.

Oil markets have been heavily disrupted, with the conflict affecting about 7.5% of global supply and prompting warnings from Goldman Sachs that prices could surpass the 2008 peak if the disruption persists.

Governments have taken steps to ease supply pressures, including a US waiver allowing certain purchases of Russian oil and plans to temporarily waive a maritime shipping law, alongside earlier releases from strategic oil reserves.

Despite these measures, rising energy costs have pushed global equities more than 5% below their February record, with Asian markets especially vulnerable due to their heavy reliance on Middle Eastern oil imports.

The conflict has also strengthened the US dollar, weakened the Japanese yen, and increased volatility in bond markets while reducing expectations for Federal Reserve rate cuts.

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