Daily Dispatch: All eyes on oil as Middle East tensions ramp up

Monday, 2 March 2026

The financial impact from escalating violence in the Middle East will be known once markets begin trading this week.

Market Summary

The weekend was consumed with Israel/US attacks on Iran, and subsequent reprisal from Iran, all of which disrupted air travel and shipping, and threatened to send oil prices soaring.

But US stock markets had already tumbled on Friday, after a hot inflation print and continued concerns about AI stocks.

At Friday’s end, the Dow Jones fell 1.05%, the S&P 500 dropped 0.43% and the Nasdaq lost 0.92%, with the latter two indices finishing February down overall amid growing fears about the impact of AI and the overall economy. Nvidia fell 4% on Friday, following a loss of 5% on Thursday, in the ongoing anxiety about whether capital spent on AI is sustainable.

And January’s producer price index in the US — a measure of wholesale inflation — showed a 0.5% increase for the month, exceeding expectations, as did the core PPI reading, which excludes food and energy prices, and recorded a 0.8% gain.

But European stocks largely escaped the sentiment plunge, with the pan-European Stoxx 600 ending Friday about 0.2% higher, while Asian stocks were mixed. Japan’s Nikkei 225 added 0.16%, South Korea’s Kospi declined 1.0%, Hong Kong’s Hang Seng rose 1% and China’s CSI 300 slid 0.34%.

Back here, the S&P / NZX 50 closed Friday up 0.38% to end a generally positive earnings season, even while consumer confidence suffered a sharp decline in February, down to 100.1 from 107.2, reversing the gains seen in January. And power prices continue their inexorable climb, even while power companies reported healthy profits across reporting season.

Notable in results from Friday were Vista Group, which saw its shares gain 10.85% after returning to profit in its 2025 financial year. Others included Hallenstein Glassons, which saw its profit gain a third, and Delegat wines, which reported a whopping 82% growth in profit in the half year.

Reefton-mining, Canadian-headquartered Rua Gold (the company has minerals permits for Reefton on the West Coast and the Hauraki Fields in the North Island) gained 8.06% on bullish commentary from the company, despite reporting a $13m loss for the year, which was nevertheless an improvement on the year prior. New Zealand King Salmon rose 7.50%.

There were just small declines on Friday - Steel & Tube dropped 4.42%, My Food Bag fell 4.26%, Argosy Property lost 2.56%, Green Cross Health slipped 2.43% and Smart Bitcoin ETF fell 2.28%, as the cryptocurrency continues to lose steam.

A satellite shot of the Strait of Hormuz - a critical transit route for oil in the Gulf region.

In Sydney the S&P/ASX 200 rose 0.25% on Friday. The top performing stocks were fintech Block Inc, the US-based company run by Jack Dorsey which said it would be laying off 4000 people as a result of AI use. That news sent shares up 27.83%. Lynas Rare Earths gained 10.09% on its highest profit in three years.

While we slept

Oil markets are bracing for a possible supply shock after US strikes on Iran over the weekend reignited fears. Analysts warn that any closure or prolonged disruption of Strait of Hormuz could push oil prices into triple digits, and markets are likely to price in an immediate-risk premium. Analysts told CNBC that the duration of the conflict would ultimately determine the severity of any spike. All eyes are now on the Strait, positioned between Oman and Iran, as it serves as a critical transit route for global crude, with about 13 million barrels per day moving through it in 2025. It links major producers including Saudi Arabia, Iran, Iraq and the UAE to the Gulf of Oman and the Arabian Sea.

Airlines have cancelled hundreds of flights in response to increasing tension in the Middle East. United, Air India, Lufthansa, and other airlines said they are cancelling flights to the region, while some Middle East carriers, such as Qatar Airways, have fully suspended operations. Airspace in the Gulf has been closed after the US and Israel launched military strikes in Iran, and travel chaos has been widespread. CNBC reports more than 1,800 flights in and out of Middle East countries were cancelled on Saturday, and another 1,400 flights in and out of the region were cancelled for Sunday.

What’s up today

In today’s The Post, Tom Pullar-Strecker reports the Reserve Bank eased capital rules despite expert caution and Dita de Boni reports ghosting job applicants is on the rise. Aimee Shaw talks to a chef who cooked for Obama about failing in business - and rebuilding again, and for this week’s Small Business Project, profiles Wellington tech consultancy Koan.