What impact will Iranian President Ebrahim Raisi’s death have on gold, oil prices

The death of Ebrahim Raisi, Iran’s President, in a helicopter crash may have a major impact on oil and gold prices, as well as global markets.      

Iran is OPEC’s third-largest producer of crude oil, and has many countries depending on it for oil. With Raisi’s sudden death plunging the government into a state of emergency, crude exports from the Middle East could be deeply impacted.

Impact of Raisi’s death on oil prices

Crude oil price: After Raisi’s death news was confirmed, oil prices in early Asian trading on Monday rose sharply.  

Brent gained 41 cents, or 0.5 per cent, to $84.39 a barrel by 0632 GMT, after rising to $84.43 earlier, its highest since May 10.  

The uncertainty over who would be Raisi’s successor, or Iran’s new President, could lead to volatility in oil markets as investors will keep a close eye on the possible impact on the country’s oil production and exports.

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Supply of Iranian crude: If there are any major disruptions to the production of crude oil by Iran, global oil supplies and prices are expected to take a hit, considering Iran is among the top oil producers in the world.

However, a report by the Economic Times quoted experts saying they believe that despite volatility, the oil market is expected to remain largely rangebound.

How Raisi’s death will have impact on gold, stock markets?

Gold price: Events that aggravate global uncertainties often push the demand for safe-haven assets like gold. With more people buying the precious metal as a safe investment option, prices are bound to shoot up.    

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On Monday, gold prices reached a new all-time high. The spot gold price jumped to a record high of $2450.49 per ounce earlier in Monday’s session. This year so far, the prices have jumped 18.65 per cent, outpacing the returns of equities and bonds.  

Stock market reacting to news: Investors will be looking at indicators of regional stability and economic policies in Iran after Raisi’s death before making any major investments.  

Impact of Raisi’s death on Israel

Tensions between Iran and Israel escalated in April after Tehran launched hundreds of drones and ballistic missiles at Tel Aviv in response to an airstrike on an Iranian Consulate in Syria.

Raisi’s death is likely to result in a phase of political instability in Iran as the country braces itself to pick a new leader.

The ET report quoted experts saying that Raisi’s death would force the administration to quickly find a new leader as Iran is engaged in a regional war and has been facing economic challenges.

It is also being said that the new president will come with his own economic policies which could possibly have implications for Iran’s relationships with other nations and its approach towards sanctions and economic reforms.