Oil Prices Climb 0.9% After US–Iran Tensions Escalate Again Over Strait Of Hormuz
· Free Press Journal
Global crude oil prices edged higher following a fresh escalation in tensions between the United States and Iran, reviving concerns over stability in the Strait of Hormuz, a critical global shipping route.
Brent crude, the international benchmark, rose about 0.9% on Monday to trade over $72 per barrel. The American benchmark, WTI Crude, also gained over 1 percent to just reach $70 per barrel.
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According to market experts, the rebound in prices reflects growing scepticism about earlier expectations of de-escalation. Oil prices had previously fallen too quickly on hopes of a ceasefire, despite ongoing military exchanges and the absence of a strong enforcement mechanism.
Recent attacks on commercial vessels and renewed tit-for-tat strikes between the US and Iran have forced the market to reassess risk premiums, they argue.
The Strait of Hormuz remains a key chokepoint, handling roughly one-fifth of global oil and liquefied natural gas trade during peacetime, making it highly sensitive to geopolitical disruptions.
The escalation also weighed on global financial markets. Asian equities traded mixed on Monday, with declines in Tokyo and Seoul offset by gains in Hong Kong and Taipei. Japan’s Nikkei 225 index fell 0.7%, while South Korea’s Kospi dropped 1.9%.
Sensex Declines 247 Points, Nifty Trades With Marginal Gains As Renewed Iran-US Tensions Weigh On Investor SentimentTechnology and AI-related stocks led losses in Japan and South Korea amid concerns over heavy investment spending and uncertain returns.
SoftBank Group declined about 5%, while Advantest fell 3.7%. In South Korea, Samsung Electronics and SK Hynix dropped around 5% and 4% respectively.
In contrast, Hong Kong’s Hang Seng Index and Taiwan’s Taiex posted gains of 2.2% and 1.4%, respectively.
The renewed tensions followed US Central Command strikes on Iran over the weekend, citing earlier attacks on commercial shipping in the Strait of Hormuz.
Iran retaliated with missile and drone strikes targeting US military assets in Bahrain and Kuwait.
Reports later suggested that Washington and Tehran had agreed to pause hostilities and resume negotiations, with potential talks expected in Doha. However, Iran has not officially confirmed the development.
A previously signed memorandum of understanding between the two nations aimed at de-escalation continues to face challenges due to repeated flare-ups and disagreements over its implementation.