KUALA LUMPUR, June 14 – Israel’s military strike on Iran on Friday sent oil prices sharply higher, pushing up the Bursa Malaysia Energy Index by 2.01 per cent to 740.76 points from 726.13 points at yesterday’s close.
At the time of writing, Brent crude oil was trading at US$74.30 per barrel.
UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan said given the scale and strategic importance of Iran in global oil markets, the current shock could produce a two- or even three-fold impact compared to previous episodes.
“Market projections had anticipated Brent crude to fall further, averaging US$61 per barrel by year-end and US$59 per barrel in 2026.
“However, this outlook was abruptly disrupted following Israel’s strike on Iran’s nuclear facilities earlier today, which sent oil prices sharply higher,” he told Bernama.
He noted that such geopolitical shocks have triggered immediate sector rotations among investors seeking to reallocate risk.
Mohd Sedek said that the escalation involving two major oil-exporting countries could potentially lead to a more pronounced and sustained impact.
Citing the Russia-Ukraine conflict, he said that Brent crude prices rose significantly from Feb 24 to March 8, 2022.
“Notably, prices had already been on an upward trend prior to the (Russian) invasion, climbing from US$73 in December 2021 to US$93 by late February.
“Similarly, Brent was already trending upwards prior to today’s escalation, having risen to around US$70,” he added.
On the outlook, he said that markets are now in the process of repricing geopolitical risk, with Brent crude potentially surging past US$80 per barrel.
“In the short term, this presents a tactical opportunity for oil and gas sector trades. Unlike the relatively short-lived two-week spike observed during the early phase of the Russia-Ukraine war, the duration of the current oil price shock could prove to be longer-lasting,” he added.
At 5 pm today, Petron Malaysia’s share price surged 14 sen to RM3.88, Hengyuan Refining Company jumped 13 sen to RM1.85, Hibiscus Petroleum increased 11 sen to RM1.66 and Deleum rose nine sen to RM1.54
