Global oil prices increased after the latest escalation in fighting between the United States and Iran. Brent crude, the main international benchmark, rose about 0.9% on Monday after tit-for-tat strikes between the two sides over the weekend, casting doubt on restoring normal shipping through the Strait of Hormuz.
Brent futures for August delivery stood at $73.21 a barrel at 03:30 GMT, up 127 cents from the day before the US and Israel launched their campaign against Iran on February 28.
“The partial recovery of Brent this morning reflects a market that perhaps ran too fast on ceasefire optimism,” Fabien Yip, market analyst at IG in Sydney, Australia, told Al Jazeera.
“Oil has almost erased its entire war premium, despite a memorandum of understanding with no enforcement details and ongoing attacks. The attack on a commercial vessel on Thursday was a reality check, and the tit-for-tat attacks this weekend have made matters worse,” Yip said.
Asian stock markets were mixed on Monday morning, with declines in Tokyo and Seoul and gains in Hong Kong and Taipei. Japan’s Nikkei 225 fell 0.7%, while South Korea’s Kospi dropped 1.9%. Japanese and South Korean stocks linked to the AI boom saw some of the biggest losses amid debate over whether tech companies’ massive investments in the emerging technology will pay off.
Japan’s SoftBank Group fell about 5%, while Advantest Corporation, a key semiconductor testing equipment maker, slid 3.7%. South Korean memory chip giants Samsung Electronics and SK Hynix dropped about 5% and 4%, respectively. In contrast, Hong Kong’s Hang Seng Index and Taiwan’s Taiex rose 2.2% and 1.4%, respectively.
“Quarter-end profit-taking is adding to selling pressure as investors lock in gains from a notable rally. The Kospi is up about 95% this year, and the Nikkei is up 37%. However, the underlying concern is whether the AI boom can continue to translate into sustainable earnings growth, or whether margin pressure will come earlier than the market expects,” IG’s Yip said.
US Central Command announced strikes on Iran on Friday and Saturday, citing Iranian attacks on two commercial vessels in the Strait of Hormuz, which in peacetime is a lifeline for about one-fifth of global oil and liquefied natural gas trade. Iran retaliated by launching a series of missiles and drones targeting US military positions in Bahrain and Kuwait.
According to several news outlets late Sunday, Washington and Tehran have agreed to halt attacks and resume talks on ending the war, citing anonymous US officials. Axios, quoting a senior US official, reported the sides will hold talks in Doha, Qatar on Tuesday. Iran has not commented on the reported ceasefire or the planned talks.
US President Donald Trump and Iranian President Masoud Pezeshkian signed a memorandum of understanding ending the war on June 17, but the agreement has been strained by repeated outbreaks of fighting and disagreements over the document’s meaning.
