Middle East Tensions Fuel Oil Price Surge

The geopolitical tensions in the Middle East have driven up oil prices, causing Brent crude to break through $100 per barrel. In August, the average price of Brent crude was $91.60 per barrel, a 9.5% increase from the previous month. By September 10, the price had risen another 6.34%, climbing to $107.63 per barrel.

The surge in oil prices is attributed to disruptions in shipping due to increased tensions in the Middle East. The Strait of Hormuz, a critical waterway for oil transportation, has seen a decline in tanker traffic, while shipping risks have risen in the Red Sea. As a result, the market is pricing in prolonged constraints on crude oil supply, driving up the risk premium.

The E Fund Asia Pacific High Dividend (03483) stands to benefit from this increase in oil prices. The fund tracks the MSCI Asia Pacific Select High Dividend Index and invests in assets across Hong Kong, Japan, and Australia, including energy, materials, banking, and utilities sectors. With approximately 40% of its portfolio invested in the Japanese and Australian markets, it achieves geographic and sectoral diversification.