The German stock index DAX faces a potentially volatile start to the trading week following reports of a US military strike against nuclear facilities in Iran. The US President's seemingly tactical delay, initially planning a two-week deferral of his decision, created an element of surprise when the order was finally issued on Sunday night.
Currently, the United States is intensifying its diplomatic efforts to bring Iran to the negotiating table, aiming to prevent further escalation of the situation. Iran, however, is presently rejecting diplomatic avenues and is in consultations with its ally, Russia. This development heightens the probability of an Iranian response, including a potential blockade of the Strait of Hormuz. Given that approximately 30 percent of global seaborne crude oil transport passes through this choke point, the repercussions for the world economy would be significant.
Strait of Hormuz: A Potential Achilles' Heel for Stock Markets
This escalation could lead to a sharp decline in stock markets on Monday, particularly for the DAX. It remains to be seen to what extent the anticipated impact has already been priced in by the market and how participants will react, especially after US markets join the trading day. The cards for the DAX will be reshuffled.
A similar dynamic is expected in the oil market. The central question for investors will be to what extent a potential closure of the Strait of Hormuz has already been factored into the current oil price. It is highly probable that oil prices could continue to rise. This scenario could present new opportunities for investors holding individual stocks within the energy sector.
Oil Price: Potential to Climb Towards 100 US Dollars
From a technical perspective, oil prices are showing clear upward momentum. The weekly candle from the previous trading week unequivocally signals technical strength. Given the escalating military confrontation between Israel and Iran, amplified by US intervention, there are currently no geopolitical arguments for a falling oil price. Drawing a parallel to the outbreak of the Ukraine war, it is entirely realistic to anticipate West Texas Intermediate (WTI) crude oil reaching 100 US dollars per barrel.
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