Oil prices bounce higher after new US strikes on Iran

Oil prices rose on Thursday, while most Asian equity markets fell, after the United States launched new strikes on Iran that tested the fragile ceasefire in the Middle East conflict.

The gains erased much of the decline seen on Wednesday, as traders hoped for a quick resolution to the dispute that has largely halted shipping through the Strait of Hormuz for months.

An American official said the military shot down four Iranian drones and struck a control centre in Bandar Abbas, a southern city.

The official, speaking to AFP on condition of anonymity, described the actions as “measured, purely defensive, and intended to maintain the ceasefire”.

Tehran’s state media reported that Iranian forces had fired at four ships in the strait, while Kuwait said its air defences were responding to missile and drone attacks.

The developments came despite an Iranian official stating that renewed hostilities with the United States were unlikely, and a threat from US President Donald Trump to “finish the job” if a peace deal was not reached.

The mixed signals highlighted the fragile state of negotiations aimed at ending the Middle East war, which has deeply affected global energy markets.

Brent North Sea crude, the main international benchmark, rose 1.8 percent in Thursday morning trade to $95.95 a barrel, while the main US contract, WTI, increased 1.7 percent to $90.17.

Stock markets across Asia were mostly down, with Hong Kong’s Hang Seng index falling more than 1.5 percent.

Seoul was down nearly one percent, while Shanghai ticked 0.3 percent lower.

Taipei’s main index gained more than one percent, while Tokyo was flat at the midday break.

The declines followed a strong day for global stocks on Wednesday, as investors, bullish on artificial intelligence, looked past the conflicting headlines on Iran.

In Asia, South Korean chipmaker SK hynix reached a $1 trillion market capitalisation, placing it alongside regional tech heavyweights Samsung Electronics and TSMC, as well as US chipmaker Micron.

The tech surge has coincided with a persistent spike in energy prices, which has threatened several major Asian economies that rely on oil shipments from the Middle East.

Economists warn that central banks may have to raise interest rates if inflation worsens as a result of the war, increasing borrowing costs and potentially weighing on economic growth.

On Wednesday, “every headline pulled the market in a different direction, leaving traders with the same conclusion they have been wrestling with for weeks”, said Stephen Innes at SPI Asset Management.

“The Strait may eventually reopen fully, but until there is something more concrete than draft frameworks and political theatre, every barrel remains hostage to headline volatility, even if sub‑$100,” he added.

– Key figures at around 0230 GMT –

Brent North Sea Crude: UP 1.8 percent at $95.95 a barrel

West Texas Intermediate: UP 1.7 percent at $90.17 a barrel

Tokyo – Nikkei 225: FLAT at 64,980.63 points

Hong Kong – Hang Seng Index: DOWN 1.5 percent at 24,943.99

Shanghai – Composite: DOWN 0.3 percent at 4,082.86

Euro/dollar: DOWN at $1.1614 from $1.1629 on Wednesday

Pound/dollar: DOWN at $1.3405 from $1.3434

Dollar/yen: UP at 159.54 from 159.53 yen

Euro/pound: UP at 86.64 from 86.59 pence

New York – DOW: UP 0.4 percent at 50,644.28 (close)

London – FTSE 100: UP 0.1 percent at 10,505.01 (close)

AFP

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