The Indian stock market eyes a gap-down opening as GIFT Nifty, India's early market indicator fell over 1% on Wednesday evening after Iran warned of attack on Gulf oil facilities in retaliation to the hit on its South Pars gas field and nearby infrastructure.
At around 9 p.m., GIFT Nifty was trading at 23,465, down 1.41% or 335 points, slipping below the 23,500 mark. Dow Jones also slumped nearly 1%, shedding over 400 points to trade at 46,570.64 within one hour of market open. Losses in big tech weighed on the Nasdaq index which slipped over 0.7% to 22,317 and S&P 500 declined 0.7% to 6,670.15.
Oil and gas prices jumped on Wednesday after the developments. According to data from Bloomberg, Brent oil climbed as much as 5% to a high of $108.60 a barrel, while Europe's gas benchmark jumped as much as 7.9%.
The attack on South Pars would mark the first strike on Iran's upstream facilities since the war began. While the US struck oil export hub Kharg Island late last week, it limited that attack to military targets.
In response to the attack Iran's Islamic Revolutionary Guard Corps responded by publishing a list of Gulf energy sites in Saudi Arabia, the United Arab Emirates and Qatar. According to the IRGC these locations have become direct and legitimate targets, the semi-official Tasnim news agency reported.
Earlier in the day Iran media reported that Phases 3, 4, 5 and 6 of the South Pars gas field were hit, forcing a shutdown to contain a fire. Firefighters were deployed, however no casualties were reported. Qatar condemned the attack saying Israeli targeting of facilities linked to Iran's South Pars field, an extension of Qatar's North Field, is a dangerous and irresponsible step amid the current military escalation in the region”.
Majed al-Ansari, a spokesperson for Qatar's Ministry of Foreign Affairs said, "Targeting energy infrastructure constitutes a threat to global energy security, as well as to the peoples of the region and its environment."
"We reiterate, as we have repeatedly emphasized, the necessity of avoiding the targeting of vital facilities. We call on all parties to exercise restraint, adhere to international law, & work toward de-escalation in a manner that preserves the security and stability of the region," Majed al-Ansari wrote on X.
Iran shares the offshore field in the Persian Gulf with Qatar. While Iran has been pounding targets in Qatar since the beginning of the war, Qatar has so far not retaliated to the aggression.
Iran has maintained that it was attacking the US bases in Qatar and other Gulf countries. Today's attack on the oil field has, however, changed the equation and has made energy facilities in Gulf countries “legitimate targets” for Iran.
The United States had earlier attacked the military installations on Kharg Island, Iran's main oil terminal. The island is responsible for the export of more than 90% of Iran's crude oil.
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