Global oil prices surged on Monday after renewed military strikes between the United States and Iran reignited fears over the security of the Strait of Hormuz, while another sell-off in technology shares dragged Asian stock markets lower.
The latest escalation comes just days after a fragile ceasefire appeared to ease tensions, with fresh fighting raising concerns over the stability of one of the world’s most critical oil shipping routes.
The US military launched another wave of strikes on Sunday after renewed clashes around the Strait of Hormuz, where several of Washington’s Gulf allies reportedly came under attack.
The renewed conflict sent benchmark crude prices soaring, with both Brent and West Texas Intermediate (WTI) climbing more than four percent as investors priced in the risk of supply disruptions.
The rally has also revived concerns that higher energy costs could fuel inflation and force central banks to tighten monetary policy further.
The latest flare-up followed an Iranian attack on a commercial vessel in the Strait of Hormuz early Sunday, forcing crew members to abandon the ship after it caught fire.
Iran’s Revolutionary Guards later declared that the strategic waterway would remain closed “until further notice and until the end of American interventions in this region,” according to state news agency IRNA.
However, the US Central Command (CENTCOM) insisted the shipping lane remained open to lawful maritime traffic.
Market analyst Fawad Razaqzada of Forex.com warned that the situation could deteriorate quickly.
“One can easily imagine the situation spiralling quite rapidly,” he said. “While tensions could still ease, markets are currently forced to prepare for the worst.”
Despite the sharp rebound in crude prices, analysts believe the gains may not match the highs reached during the early stages of the conflict.
Fabien Yip, an analyst at IG, said the market had previously priced in a best-case outcome following efforts to restore calm between Washington and Tehran.
She noted that while renewed fighting has restored a geopolitical risk premium, sluggish global demand, increased OPEC+ production, and additional crude supplies are likely to cap further price gains.
Tech Stocks Lead Market Losses
Asian equity markets were mixed, with South Korea suffering the biggest losses as technology stocks extended their recent slump.
The Kospi index plunged more than five percent, weighed down by a nearly 10 percent drop in chipmaker SK hynix, which has now lost roughly one-third of its market value since reaching record highs last month.
Samsung Electronics also declined more than six percent, while Japanese technology firms Advantest and Tokyo Electron posted losses in Tokyo trading.
Elsewhere, Shanghai, Singapore, Wellington and Jakarta closed lower, while Hong Kong, Taipei and Manila recorded modest gains.
Investors Await Earnings
The US dollar strengthened on safe-haven demand and expectations that the Federal Reserve could still raise interest rates later this year if higher oil prices keep inflation elevated.
Attention is now turning to the corporate earnings season, with investors looking for fresh insight into the outlook for artificial intelligence and semiconductor industries.
This week, Taiwan Semiconductor Manufacturing Company (TSMC) and Dutch chip equipment maker ASML are scheduled to release earnings, alongside major US financial institutions including JPMorgan Chase, Bank of America and Goldman Sachs.
Key Market Snapshot
- West Texas Intermediate (WTI): Up 4.3% to $74.49 per barrel
- Brent Crude: Up 4.2% to $79.21 per barrel
- Kospi (Seoul): Down 5.0%
- Nikkei 225 (Tokyo): Down 1.1%
- Hang Seng (Hong Kong): Up 0.7%
- Shanghai Composite: Down 0.8%
- Dow Jones: Closed up 0.3%
- FTSE 100: Closed up 0.2%
