Australian shares have plunged 3.4 per cent, losing more than $100 billion in value, after oil prices soared as much as 22 per cent off the back of the Iran war.
The S&P-ASX200’s losses quickly widened after the index opened Monday down 2.7 per cent.
As at 7.50am, it was 3.35 per cent, or 300.4 points, lower at 8550.6.
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Investors are increasingly worried the war between Iran and the US and Israel will kick inflation higher, threatening global growth.
Oil prices punched through $US100 a barrel, racing to their highest level since Russia’s invasion of Ukraine four years ago, as more Middle East producer curbed production, fuelling fears of a supply crunch that will hurt global economic growth.
The price of Brent spiked as much as 20 per cent to $US111.04 a barrel, while West Texas Intermediate jumped 22 per cent.
Countries such as Kuwait and the United Arab Emirates have started reducing output because storage is nearly full with the closure of the Strait of Hormuz.
US President Donald Trump addressed the the oil price spike with a late night post on his social media platform Truth Social, saying that the movements are a “very small price to pay” for the US, the world, and peace.
