A. SREENIVASA REDDY (ABU DHABI)
Oil and gold prices have risen sharply following the recent tensions in the Gulf region, as investors reassess supply risks and broader geopolitical uncertainty.
Brent crude futures rose as much as 13% to $82.37 a barrel, their highest since January 2025, before easing to trade up $6.27, or 8.6%, at $79.14 a barrel at 1403 GMT on Monday, according to a Reuters price update. US West Texas Intermediate crude was up $5.05, or 7.5%, at $72.07, after earlier climbing more than 12% to $75.33, its highest since June.
Josh Gilbert, Market Analyst at eToro, said investors are navigating one of the most unpredictable geopolitical backdrops in recent years. “Markets hate uncertainty, and right now investors are facing one of the most unpredictable geopolitical backdrops in years. The key question is not just what has happened, but how long this disruption lasts and whether we see escalation or de-escalation in the coming days,” he said.
Oil markets have been particularly sensitive to developments around the Strait of Hormuz. Gilbert noted that even without a full closure of the Strait, disruption to tanker traffic is sufficient to unsettle energy markets, adding that conflicting signals have increased the uncertainty investors are trying to price in.
According to Jorge Leon, Senior Vice President and Head of Geopolitical Analysis at Rystad Energy, approximately 15 million barrels per day (bpd) of crude oil transit the Strait of Hormuz, representing close to 30% of global seaborne crude trade. He described it as the most critical oil chokepoint in the world, noting that any sustained disruption, whether formal or de facto, would remove a substantial portion of globally traded crude from the market.
Leon said alternative infrastructure in the region can partly bypass the Strait. Saudi Arabia can redirect volumes via its East-West pipeline to the Red Sea, with capacity of about 5 million bpd, while the UAE can utilise the Abu Dhabi pipeline, with capacity of around 1.5 million bpd. However, even assuming full utilisation of these routes, a significant share of exports, potentially in the range of 8-10 million bpd, would remain exposed if the Strait remains inaccessible.
From a pricing perspective, Leon said that in the absence of clear de-escalation signals, markets could reprice sharply higher.
At the same time, both experts pointed to mitigating buffers. Gilbert noted that the global oil market entered this period with relative oversupply and that OPEC+ had already announced a production increase of 206,000 bpd for April. Major consuming nations, including the US and China, hold strategic reserves, while Saudi Arabia has pipeline capacity to reroute some exports. Leon similarly highlighted that Saudi Arabia has increased crude loadings in recent weeks and that strategic petroleum reserves held by major consuming nations, including China, could provide temporary cushioning to the market.
Gold has also strengthened as investors rotate toward traditional safe-haven assets. Prices climbed above $5,350 per ounce, gaining roughly 22% year-to-date, according to the market update. “Gold remains the asset investors turn to in times of geopolitical stress,” Gilbert said, adding that unless meaningful de-escalation emerges, safe-haven demand is unlikely to fade.
Meanwhile, higher-risk assets, including cryptocurrencies, have come under pressure as investors rotate toward defensive positions. “In risk-off environments, capital typically flows to traditional safe havens rather than more volatile assets,” Gilbert added.
The Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) remain closed on Monday and Tuesday. Investors are now assessing how markets could respond once trading resumes. Gilbert noted that historical precedents vary widely, with outcomes depending largely on the trajectory of geopolitical developments in the days ahead.
Gilbert offered advice to investors. “The instinct in moments like this is to act, but for most long-term investors, doing very little is often the wiser approach. Selling into panic rarely proves to be the right decision in hindsight.”
He concluded: “There is room for volatility when UAE markets reopen, particularly as very little geopolitical risk had been priced in. However, if de-escalation emerges quickly, the long-term fundamentals of the UAE — strong infrastructure, a pro-business regulatory framework, and its role as a regional hub — remain intact. Short-term turbulence does not undo decades of structural progress.”