Brent surges above $110 as fears grow that the US-Iran war could drag into a prolonged conflict, while the UAE’s shock OPEC exit raises questions over a broader Middle East energy realignment.
The US-Iran conflict has propelled currencies from energy-exporting countries into the limelight, with windfall profits from exports of oil, gas and metals helping them to outperform the US dollar.
– Strategists from JP Morgan and Deutsche Bank have singled out the Norwegian krone and the Australian dollar as the most promising energy-linked currencies, whilst the Brazilian real has so far been the best-performing major currency with a 3.15% uplift on the US dollar since March.
– Kazakhstan has been the best-performing currency globally, gaining 10% over the past two months, as crude oil accounts for 17% of the country’s GDP.
– Windfall profits from energy sales could prompt major exporters to adopt a tighter monetary policy, potentially even interest rate hikes in 2026 to cap inflation.
– India, 89% dependent on crude oil imports to cover its domestic needs, has caught the other end of the stick, with the Indian rupee losing almost 3.5% compared to the US dollar since the onset of the US-Iran war.
