The Australian share market slumped to a ten-month low, weighed down by miners, real estate and industrials.
The sell-off was widespread and even sharper on the other Asian markets, as traders worried about the escalating threats by Washington and Tehran to target energy infrastructure as the war enters its fourth week.
Senior macro strategist with Rabobank, Ben Picton says volatility will likely continue for several days.
In the longer term, he says some of the panic buying and supply chain shock is similar to what we experienced during COVID. The difference is, this time round, we're seeing these disruptions with an economy that already has an inflation problem. "So we're seeing interest rates going up, whereas during COVID, we were cutting interest rates," he says.
"If the supply side shock turns into a big drop off in demand and we start seriously throwing around the R-word, recession, then maybe the conversation changes and we might be talking about rate cuts at some point in the future."
And in the face of rumoured stoppages to bunker fuel exports from Singapore, he says it's possible Australian supplies could be rationed within weeks.
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