Written by: Salma El-Saqqa
Global markets have witnessed significant turmoil, as oil prices approached record levels due to escalating tensions in the Middle East and the Russia-Ukraine conflict. The price of Brent crude reached $114.70 per barrel in early trading, the highest level since last May, reflecting growing concerns about the stability of global energy supplies.
The Impact of Geopolitical Tensions on Energy Markets
This jump in oil prices is driven by security risks in vital waterways, as threats have increased in the Strait of Hormuz, in addition to attacks targeting facilities in the Red Sea region. The uncertainty surrounding potential military operations and the targeting of energy infrastructure also contributes to increasing the risk premium on crude prices, pushing prices toward peak levels previously recorded during crises.
Decline in the Technology Sector and Precious Metals
On the other hand, the technology sector faced sharp selling pressure due to growing concerns about the economic viability of massive investments in the field of artificial intelligence. This decline was reflected in the shares of major companies such as Nvidia, Amazon, Microsoft, and Meta, as anxiety over not achieving quick returns on invested capital led to a notable decline in the Nasdaq index.
Precious metals were not immune to these fluctuations, as the price of an ounce of gold fell to levels below $4,000 as investors moved toward safer assets such as US bonds. Silver prices were also directly affected due to their correlation with demand from the technology sector, recording low levels not seen in a long time, coinciding with a decline in cryptocurrencies such as Bitcoin and Asian markets.
