Bangkok, Mar 2 (AP) Military strikes on Iran rattled global markets on Monday, with US futures following markets in Europe and Asia lower. Energy prices rose sharply.

Futures for the S&P 500 and Dow Jones Industrial Average each sank about 1 per cent.

The price of a barrel of US benchmark rose more than 8 per cent to USD 72.70 per barrel, a price not seen since the US summer driving season and the 12-day Israel-Iran war. Brent crude jumped 9 per cent to nearly USD 79.19 per barrel.

The spike in the cost for a barrel of crude could show up in a matter of days or weeks at gas pumps, with retailers forced to pay more for new shipments of gasoline.

Travel sectors, from airlines and cruise operators to global hotel chains, tumbled.

But it wasn't just oil. Natural gas futures rose by 6 per cent, and futures for fuel used for transportation as well as industrial purposes, spiked more than 14 per cent.

Germany's DAX dropped 1.9 per cent to 24,817.42, while in Paris the CAC 40 lost 1.7 per cent to 8,435.80. Britain's FTSE 100 slipped 1 per cent to 10,808.53.

Shares fell in most Asian markets, but they rose in Shanghai, where higher oil prices lifted some oil company stocks such as CNOOC, China Petroleum & Chemical and PetroChina to the 10 per cent limit.

The Shanghai Composite index climbed 0.5 per cent to 4,182.59, while in Hong Kong, the Hang Seng lost 2.1 per cent to 26,059.85.

Japan's Nikkei 225 index initially fell more than 2 per cent. It closed 1.4 per cent lower at 58,057.24. Offsetting other losses, shares in defence-related stocks, including Mitsubishi Heavy Industries and IHI Corp., advanced.

In India, which could face disruptions to its access to oil due to the hostilities, the Sensex fell 1.3 per cent.

Taiwan's benchmark lost 0.9 per cent, and Singapore's dropped 2.3 per cent. In Bangkok, a major tourism destination for the Middle East, the SET fell 4 per cent.

Markets were closed in South Korea for a holiday.

Gold, a safe haven for investment in times of uncertainty, rose 3.1 per cent to about USD 5,408.10 per ounce.

The US dollar also gained, rising to 156.88 Japanese yen from 156.27 yen late Friday. The euro slipped to USD 1.1740 from USD 1.1762.

The war is likely to disrupt oil supplies from Iran and elsewhere in the Middle East. Attacks throughout the region, including on two vessels travelling through the Strait of Hormuz, the narrow mouth of the Persian Gulf, have constrained oil exports to the rest of the world.

“Roughly one-fifth of global oil and LNG (liquefied natural gas) flows squeeze through the Strait of Hormuz. This is not an obscure canal. It is the aorta of the global energy system,” Stephen Innes of SPI Asset Management said in a commentary.

Prolonged interruptions to oil flows through the Middle East would have “huge implications for oil and LNG and every market everywhere if it occurs. Energy is an input to ALL production,” RaboResearch Global Economics & Markets said in a report.

Iran exports roughly 1.6 million barrels of oil a day, mostly to China. It may need to look elsewhere for supply if Iran's exports are disrupted, another factor that could increase energy prices.

The size of China's strategic oil reserves is a state secret. But a recent report by John Kemp of Base Research estimated them at 1.1 billion to 1.2 billion barrels, equivalent to around 100 days or just over three months of imports.

The war's impact on markets was muted somewhat because the attacks were anticipated, with a massive buildup of US forces in the Middle East. So traders had adjusted their positions to take that risk into account.

The conflict has shifted attention, for now, away from issues surrounding artificial intelligence that have dominated markets in recent months.

Treasury yields fell in the bond market as investors sought safer places for their money.

“When markets are fragile, they do not need a knockout blow. They just need another weight on the bar,” Innes said.

Also hurting the broad market was a report on Friday showing that inflation at the US wholesale level was at 2.9 per cent last month, much higher than the 1.6 per cent that economists expected.

That could pressure the Federal Reserve to hold off longer on its cuts to interest rates. Lower rates would give the economy and prices for investments a boost, but they risk worsening inflation. (AP) SKS SKS