Global oil prices surged by more than 4 percent on Monday after renewed military clashes between the United States and Iran reignited fears over the security of the Strait of Hormuz, one of the world’s busiest oil shipping routes.
The fresh escalation also unsettled global financial markets, with major Asian stock indexes posting losses as investors rushed toward safer assets.
The latest tension follows another round of military strikes by the United States after renewed fighting in the Gulf region. The conflict has raised concerns over the fragile ceasefire and ongoing diplomatic efforts aimed at keeping the Strait of Hormuz open for international shipping.
Adding to market anxiety, Iran’s Revolutionary Guards announced that the Strait of Hormuz would remain closed “until further notice,” accusing the United States of continued military intervention in the region.
However, the US Central Command (CENTCOM) insisted the strategic waterway remains open to commercial vessels operating lawfully.
The renewed uncertainty pushed benchmark crude prices sharply higher.
Brent crude climbed 4.2 percent to $79.21 per barrel, while West Texas Intermediate (WTI) rose 4.3 percent to $74.49 per barrel.
Market analysts warned that any prolonged disruption to oil supply could fuel inflation globally and force central banks to keep interest rates higher for longer.
According to analysts, while oil prices have rebounded strongly, they are still unlikely to reach the record highs seen during the early stages of the conflict because global demand remains relatively weak and OPEC+ continues to increase production.
Meanwhile, Asian stock markets reacted negatively to the renewed tensions.
South Korea’s Kospi Index fell 5 percent, weighed down by another heavy sell-off in technology stocks.
Chipmaker SK hynix dropped around 10 percent, extending recent losses, while Samsung Electronics also declined by more than 6 percent.
Japan’s Nikkei 225 also traded lower, with technology companies such as Advantest and Tokyo Electron recording losses.
Elsewhere, markets in Shanghai, Singapore, Wellington and Jakarta closed lower, while Hong Kong, Taipei and Manila managed modest gains.
The US dollar strengthened as investors sought safer investments and anticipated that the US Federal Reserve could maintain higher interest rates if rising oil prices continue to fuel inflation.
Investors are also watching this week’s corporate earnings from major global companies, including TSMC, ASML, JPMorgan Chase, Bank of America, and Goldman Sachs, for fresh signals on the global economy and the technology sector.
Source: AFP.
