Following the path of global equity markets, the Pakistan Stock Exchange (PSX) on Monday witnessed a bloodbath, as the benchmark KSE-100 Index plummeted nearly 1,300 points on Monday.

By the end of the session, the KSE-100 had retreated 1,284 points or 2.88% to fall below 43,200.

Panic selling was witnessed at the bourse, as oil prices soared more than 9%, touching their highest since 2008, as the United States and European allies mull a Russian oil import ban and delays in the potential return of Iranian crude to global markets fuelled tight supply fears.

Brent crude futures jumped $12.61, or 10.6%, to $130.72 a barrel, while US West Texas Intermediate (WTI) crude climbed $10.41, or 9%, to $126.09 earlier in the day.

Gold prices scaled the $2,000-level for the first time in a year-and-a-half, as investors rushed to the safety of the metal in the wake of an escalating Russia-Ukraine crisis, while supply disruption fears sent palladium to an all-time high.

“The market is reacting to the oil price hike which has irked investors, as the US and EU have called for banning Russian oil imports,” Abdullah Umer, research analyst at Ismail Iqbal Securities Limited, told Business Recorder.

He added that it was anticipated that the ongoing talks between Iran and the US would bring in Iranian oil into the markets, which may fill the gap caused by Russian oil ban to some extent.

“However, now it is learnt that the arrival of Iranian oil into the market would face a lag of few months amid supply constraints, and ramping up the capacity from Iran,” Umer added.

Ismail Iqbal Securities in its report said that before new sanctions in 2018, Iran was exporting 2.5 million barrels per day of crude oil which has now been reduced to 0.6-0.8 mbpd.

“However, the country’s ability to reach pre-sanctions exports level in the short span of time has not been determined yet. In consideration of these facets, oil supply is likely to remain tight in the short run.

"Even in the case of any temporary respite in the Ukraine war, sanctions on Russia are likely to remain in place in the short term,” said the report.

Following the development, equity markets plunged as well with a sea of red witnessed at equities across the globe.

Asian bourses were deep in the red, with Hong Kong at one point losing more than four percent, while Tokyo and Taipei were off more than three percent.

Seoul and Manila were both down more than two percent, with Shanghai, Sydney and Wellington off more than one percent.