Crude oil values surged more than 5% Monday while Asian stock markets posted gains as continuing tensions between the United States and Iran kept commercial vessels from passing through the critical Strait of Hormuz.
The vital Persian Gulf shipping route remained blocked after Iran backtracked on its decision to allow passage and President Donald Trump maintained that a U.S. Navy blockade of Iranian ports continues.
U.S. benchmark crude jumped 5.6% to reach $87.20 per barrel, while Brent crude, the global benchmark, rose 5.3% to $95.16 per barrel.
Even with fresh uncertainty about when vessels will resume carrying the enormous volumes of oil that flow from the Middle East to global markets, Asian stock indexes posted mostly positive results.
Tokyo’s Nikkei 225 rose 1% to 59,045.45, while South Korea’s Kospi increased 1.1% to 6,260.92.
Hong Kong’s Hang Seng climbed 0.8% to 26,373.71 and the Shanghai Composite index moved up 0.6% to 4,075.08.
Australia’s S&P/ASX 200 remained nearly flat at 8,943.90.
Taiwan’s Taiex surged 1.4%.
“The problem for markets is not the absence of hope; it is the overpricing of it,” Stephen Innes of SPI Asset Management said in a commentary. “The latest move higher in equities has started to feel less like conviction and more like momentum feeding on itself.”
Last Friday, petroleum prices had fallen back to levels seen in the early stages of the Iran conflict, and U.S. equity markets soared to new records after Iran announced the waterway was reopened for commercial tankers transporting crude from the Persian Gulf to global customers.
Improved oil flow could ease cost pressures on gasoline and numerous other products that depend on vehicle transportation. Such relief might eventually help consumers pay less for credit card interest and home loan payments.
The S&P 500 jumped 1.2% to reach a record high of 7,126.06, completing its third consecutive week of substantial gains – the longest such streak since Halloween.
The Dow Jones Industrial Average soared 1.8% to 49,447.43. The Nasdaq composite advanced 1.5% to 24,468.48.
U.S. equity markets have climbed more than 12% since reaching a low point in late March on expectations that the United States and Iran might prevent a worst-case economic scenario despite their ongoing conflict.
Benchmark U.S. crude prices had tumbled 9.4% after Iran’s foreign minister, Abbas Araghchi, announced on X that transit for all commercial ships through the strait “is declared completely open” as a ceasefire appears to be maintaining stability in Lebanon.
Brent crude dropped 9.1%.
Following Araghchi’s statement, Trump posted on his social media platform that the U.S. Navy’s blockade of Iranian ports remained “in full force” until a war agreement is reached, though he also indicated that “should go very quickly in that most of the points are already negotiated.”
President Donald Trump announced Sunday that the U.S. had captured an Iranian-flagged cargo vessel that attempted to bypass a naval blockade. Iran’s joint military command stated Tehran would respond soon and characterized the U.S. seizure as an act of piracy.
A delicate, two-week ceasefire between the U.S. and Iran is scheduled to end Wednesday, while growing tensions in the Strait of Hormuz create uncertainty about future negotiations to conclude the war.
Throughout the conflict, market attitudes have oscillated between hope and pessimism regarding when hostilities will cease and what economic damage the world will suffer. A positive beginning to the earnings reporting period for major U.S. corporations has provided additional support for stocks.
In early Monday currency trading, the U.S. dollar strengthened to 158.90 Japanese yen from 158.79 yen. The euro gained to $1.1757 from $1.1742.
