War creates energy price risks, warn executives

The war in the Middle East could become a prolonged geopolitical risk, with attacks already spreading across the region and likely to persist for more than a month, potentially causing an energy supply shortage, warn capital market executives.

- NUNTAWUN POLKUAMDEE NAREERAT WIRIYAPONG

Win Phromphaet, executive chairman of Kasikorn Asset Management, said despite expectations of a prolonged confrontation, global financial markets have not shown significant signs of panic.

"The market reaction to the escalating conflict has been surprisingly muted," he said.

"US equities have remained relatively resilient, gold prices have not surged dramatically, and cryptocurrencies have avoided steep declines, which is unusual given the geopolitical backdrop."

The conventional wisdom is the US and Israel hold a strategic advantage over Iran because they maintain military bases surrounding the Gulf state, allowing them to project power more effectively, said Mr Win.

In contrast, Iran's allies are located farther away, limiting their ability to provide immediate military support.