By Mardiyyah Abubakar
Global oil prices climbed more than four per cent on Monday after renewed military confrontation between the United States and Iran rattled financial markets and reignited fears over the security of the Strait of Hormuz, one of the world’s most critical oil shipping routes.
The latest escalation came just days after both sides appeared to be moving towards a fragile truce. However, fresh fighting erupted over the weekend, with the US launching a new wave of military strikes on Sunday following attacks that targeted several of Washington’s Gulf allies. Tensions intensified further after Iran attacked a commercial vessel in the Strait of Hormuz, forcing its crew to abandon the burning ship.
Iran’s Revolutionary Guards subsequently declared that the strategic waterway would remain closed until what it described as the end of US intervention in the region. The US Central Command (CENTCOM), however, maintained that the Strait remains open to lawful maritime traffic.
The renewed hostilities sent both major global oil benchmarks up by as much as 4.5 per cent, raising fresh concerns that prolonged disruptions to energy supplies could drive up inflation and force central banks to keep interest rates elevated for longer.
The uncertainty also rippled through Asian financial markets, with technology stocks bearing the brunt of investor sell-offs. South Korea’s Kospi index tumbled five per cent, as chipmaker SK hynix plunged 10 per cent while Samsung Electronics lost more than six per cent.
Japan’s Nikkei 225 also closed lower, weighed down by losses in major technology firms including Advantest and Tokyo Electron.
Markets in Shanghai, Singapore, Wellington and Jakarta ended in negative territory, while Hong Kong, Taipei and Manila managed modest gains.
Meanwhile, investors flocked to the US dollar as a safe-haven asset while awaiting earnings reports from major technology companies and Wall Street banks, which are expected to provide fresh insight into the outlook for artificial intelligence, corporate performance and the broader global economy.
