Analyst: Surging oil prices may lead to sell-off of US assets

Golden Ten Data reported on March 20 that rising crude oil prices are a headache for overseas importers, but they may shift the pain onto U.S. assets. After the U.S. and Israel attacked Iran, global oil import costs increased, and most major economies' currencies have been hit against the U.S. dollar. This double blow has created a situation: as the dollar strengthens and oil prices soar, overseas countries and companies may have to sell their holdings of U.S. stocks and bonds to pay for suddenly much more expensive oil. This is a risk worth monitoring, especially as the share of foreign countries and governments in the U.S. market continues to grow. Brij Kulana, portfolio manager at Wellington Management Company, said that so far, foreign investors have not needed to liquidate U.S. assets to finance higher energy costs. However, if oil prices remain high, countries such as Japan and South Korea may need to reduce their holdings of U.S. stocks and bonds to raise funds for energy imports.