Live updates: Follow the latest news on US-Iran war
Oil prices jumped nearly 4 per cent on Thursday morning while Asian stocks slid from record highs, after the US renewed strikes on Iranian military targets, reigniting the conflict and potential disruption to critical oil flows through the Strait of Hormuz.
Brent, the benchmark for two thirds of the world’s oil, was up 3.55 per cent to $97.64 a barrel at 9.39am UAE time. West Texas Intermediate, the gauge that tracks US crude, climbed 3.78 per cent to $92.03 a barrel.
Both benchmarks slipped more than 5 per cent on Wednesday to their lowest respective levels in the past month and a half, after reports the Strait of Hormuz would be reopened “within a month”.
The US military carried out another wave of strikes on Iranian drones and a launch site on Thursday. The drones posed a threat to American forces and commercial shipping in the Strait of Hormuz, a US official said, hours after President Donald Trump had dismissed an Iranian report of a deal to restore traffic on the waterway. Iran’s Islamic Revolutionary Guard Corps (IRGC) acknowledged an American military base had been targeted in response to a US attack near Bandar Abbas Airport in the south of the country.
Kuwait's army also reported missile and drone attacks on Thursday morning.
“There is a new problem emerging in the Strait of Hormuz: Iran wants to control it with Oman,” Ipek Ozkardeskaya, senior analyst at Swissquote, told The National. “That was not in the plan. A deal now looks more complex than it did a few days ago and the immediate impact is higher oil prices.”
Mr Trump on Wednesday dismissed reports that Iran and Oman would oversee shipping in the Strait of Hormuz as part of a deal to end the war, signalling any potential agreement remains out of reach.
“Yesterday, the market swung between the hope amid the Iranian memorandum and slashed again after the US denied reports – somehow casting shadow on how close the two parties are to a concrete deal,” said Ms Ozkardeskaya.
Stocks retreat
The MSCI index of Emerging Markets Asia equities dropped more than 2 per cent on Thursday morning in its worst session in two weeks, as stocks in South Korea and Taiwan linked to artificial intelligence pulled back from recent highs.
Japan's Nikkei lost 1.4 per cent, while South Korean shares slid 3.2 per cent. MSCI's broadest index of Asia-Pacific shares, excluding Japan, fell 2.1 per cent.
Singapore's FTSE Straits Times Index fell about 1 per cent to a seven-session low, while stocks in Thailand and the Philippines shed between 1 per cent and 1.8 per cent. China's blue-chip CSI 300 Index had slipped 0.6 per cent by lunch.
