Oil prices rose while global stock markets declined Tuesday as tensions escalated in the Middle East, with the United States and Israel continuing strikes on Iran and Tehran retaliating against neighbouring countries.
The conflict has disrupted regional energy flows, particularly through the Strait of Hormuz, a critical passage for roughly a fifth of the world’s oil shipments. This has raised concerns over a potential energy crisis and the impact on global inflation. However, markets have so far seen relatively moderate movements, reflecting hopes that the crisis may be short-lived.
US President Donald Trump commented that the military campaign, which began with the killing of Iran’s supreme leader Ali Khamenei, was progressing ahead of schedule, while cautioning that it could last more than four weeks. He outlined objectives including targeting Iran’s missile and nuclear programs, navy, and support for armed groups, but did not indicate an intention to overthrow the government. The US State Department advised Americans to leave the Middle East from Egypt eastward.
Iran has launched missiles and drones across Lebanon, Saudi Arabia, Qatar, and Dubai, warning that it could drive up global energy costs. Oil prices surged nearly 14 percent Monday before easing slightly, and European natural gas prices jumped almost 40 percent following Qatar’s announcement of halted LNG production.
A Revolutionary Guards general warned that Iran could target oil pipelines and vessels in the Strait of Hormuz, potentially pushing crude prices to $200 per barrel. Analysts noted that sustained energy shocks could challenge central banks trying to control inflation while supporting economic growth.
Asian equity markets also suffered losses, with South Korea’s Seoul market falling over five percent and other major exchanges in Tokyo, Hong Kong, Shanghai, Sydney, Wellington, Taipei, and Jakarta declining. Airlines were among the hardest hit, including Japan Airlines, Cathay Pacific, and Qantas.
Key figures at 0330 GMT included:
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West Texas Intermediate: up 2.0% at $72.65 per barrel
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Brent North Sea Crude: up 2.5% at $79.67 per barrel
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Tokyo – Nikkei 225: down 2.6% at 56,528.10
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Hong Kong – Hang Seng Index: down 0.3% at 25,986.83
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Shanghai – Composite: down 0.1% at 4,179.46
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New York – Dow: down 0.2% at 48,904.78
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London – FTSE 100: down 1.2% at 10,780.11
