Overview
- Brent crude climbed to about $113 per barrel on Thursday after reports of new attacks in the Middle East raised concerns about disruptions to oil flows.
- Iran reported that seven tankers were set on fire after being hit or by mines in the Strait of Hormuz, while Saudi authorities said strikes hit a Saudi Aramco oilfield and an airport and the U.S. ordered some diplomats to leave the region.
- The oil shock compounded weak signals from large U.S. tech earnings, prompting investors to move money into assets seen as safer and driving European and U.S. stock indexes lower, with the Nasdaq falling most sharply.
- In Brazil, heightened electoral uncertainty plus the external shock pushed short- and medium-term interest-rate futures higher, sent the Ibovespa down about 1.15%, and nudged the spot real weaker by roughly 0.22%.
- The gains in oil threaten higher domestic inflation and interest costs and could prompt exporters and foreign investors to shift flows, a dynamic that may affect borrowing costs and household budgets in the coming months.