Strait of Hormuz

Before the war, roughly 15 million barrels of Gulf oil passed through the Strait of Hormuz every day, as roughly a fifth of the world’s traded oil moved through the maritime chokepoint in peacetime.

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With the channel still largely closed and prices elevated, at least seven major pipeline projects are now under construction, in planning or under discussion to push supplies out through the Red Sea, the Suez Canal and the Gulf of Oman instead, according to Gulf officials, energy companies and market analysts.

With the Iran war reignited this month, Brent crude is trading again at around $93 a barrel at the time of writing, well above the roughly $72 it fetched after June’s short-lived truce, and the US benchmark WTI has also risen to roughly $90 a barrel.

Depending so heavily on the Strait of Hormuz “is no longer a prudent long-term strategy,” said Victoria Grabenwöger, a senior researcher at the data firm Kpler.

Two escape valves already exist, and both are close to their limits.

Saudi Arabia’s East-West pipeline, built in the 1980s when Tehran threatened shipping during the Iran-Iraq war, carries crude from the Abqaiq complex to Yanbu on the Red Sea, where tankers head south towards the Arabian Sea or north to the Suez Canal.

Meanwhile, the UAE has been channelling more oil to Fujairah, its port on the Gulf of Oman about 145 kilometres south of the Strait of Hormuz.

Together the two links had a spare capacity of some 3.5 to 5.5 million barrels a day before the war, according to the US Energy Information Administration, and both now run close to full representing around 6.5 million barrels a day.

Abu Dhabi’s state oil company is also racing to finish a project it began before the war.

Its $3 billion (€2.6bn), 300-kilometre pipeline to Fujairah, laid alongside an existing line, is designed to lift deliveries by over 1.2 million barrels a day and is roughly half built, according to Kpler, which expects the official early-2027 completion target to slip to mid-2027 because the port itself must be expanded.

Even that timetable, the firm argues, only became conceivable because of the blockade.

Red Sea relief, Red Sea risk

The Red Sea route has vulnerabilities of its own, and this week served as a reminder.

Yemen’s Iran-backed Houthi rebels, who declared a blockade on Saudi-linked shipping in retaliation for the kingdom’s blockade of Yemen and an attack on Sanaa’s airport, said on Thursday they had attacked two Saudi tankers, the Encelia and the Layla, setting both on fire.

Saudi state media reported a blaze at the bow of the Encelia with no casualties, while the UK Maritime Trade Operations centre reported a tanker struck by “an unknown projectile” southwest of Al Shuqaiq.

The Iran-backed group has disrupted the Bab el-Mandeb Strait before, a maritime chokepoint carrying about 12% of world trade, and a Houthi drone strike forced the East-West pipeline itself to shut back in 2019.

Iraq’s $60 billion bet on Washington

Nowhere is the scramble more urgent than in Iraq, which draws about 90% of state revenues from oil exports and has had to cut output because of its dependence on the Strait of Hormuz.

Prime Minister Ali al-Zaidi returned from Washington last week with 48 agreements signed with American firms, spanning energy, healthcare and technology and worth more than $60 billion, according to Reuters, including tie-ups involving ExxonMobil, Shell, Halliburton, KBR and GE Vernova.

The centrepiece is a deal with Syria to rebuild the long-dormant pipeline running from the Kirkuk fields to the Mediterranean port of Baniyas, a project Iraqi state media says Chevron will execute and which the US State Department, welcoming the plan, called “a critical energy corridor” with an initial capacity of 2 million barrels a day.

Baghdad is also weighing a line from Basra to Jordan’s Aqaba.

Washington’s ambassador to Turkey, Tom Barrack, predicted the agreements would render the Strait of Hormuz “an afterthought”.

Published on
20/07/2026 – 10:53 GMT+2

Oil prices jumped in early trading as the US announced further attacks for a ninth consecutive night. Iran has responded to the strikes by targeting US allies across the Middle East.

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Brent crude, the international benchmark, rose 3.2% to $90.95 per barrel, while US benchmark crude climbed 2.8% to $84.04 per barrel.

“The US and Iran continue to exchange strikes, which are proving to be deadly for both sides,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a commentary on Monday.

“If this escalation goes unchecked, we could return to an environment of widespread attacks across the Persian Gulf,” they added.

Tanker traffic through the Strait of Hormuz, a crucial waterway for global oil transport, has nearly ground to a halt, adding to pressure on supplies, they noted.

Elsewhere, AI-related shares including chipmaking stocks declined on Friday, pulling world markets lower. Pledges of huge spending on AI are fuelling worries the sector may be in a bubble, and many investors have opted to sell to lock in profits from recent big gains.

“The return to war in the Strait of Hormuz may start to weigh more heavily on financial markets before too long, especially if even strong tech earnings reports continue to be met with scepticism,” Jonas Goltermann, chief markets economist at Capital Economics wrote in a note Monday.

Markets were also shaken by the rollout of another powerful Chinese AI model, this time by Beijing-based Moonshot AI.

The impact of the new Kimi K3 open-source AI model was similar to when China’s “ DeepSeek moment” rattled world markets in early 2025. It was viewed as another sign of how lower-cost, capable Chinese AI models are increasingly challenging rivals like Anthropic’s Claude and OpenAI’s GPT.

Additional sources • AP

Published on 13/07/2026 – 6:56 GMT+2•Updated
6:59

The price of Brent crude, the international benchmark, gained 3.9% to $78.96 per barrel, while the US benchmark crude oil price rose 4% to $74.26 per barrel.

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Prices for both types of crude oil had recently slipped back to the levels seen before the war with Iran began, after the two sides reached an interim agreement to end the conflict and ships resumed transporting oil through the Strait of Hormuz.

However, the United States launched several waves of strikes on Iran early on Monday morning following an Iranian attack on a container ship in the Strait of Hormuz that set the vessel ablaze and left one crew member missing over the weekend. Iran retaliated by targeting countries across the Middle East.

US stock futures fell, with the contract for the S&P 500 down 0.4% and that for the Dow Jones Industrial Average 0.3% lower. Nasdaq Composite futures lost 1%.

In Asian trading, Tokyo’s Nikkei 225 index lost 1.1% to 67,786.86, while in Seoul, the Kospi declined 5.6% to 7,060.69.

Shares in South Korean memory chipmaker SK Hynix, which soared 13% on their Wall Street debut on Friday, slumped 10.6% in Seoul. Its bigger rival, Samsung Electronics, fell 6.7%.

Elsewhere in Asia, Hong Kong’s Hang Seng edged 0.1% higher to 24,202.41, and the Shanghai Composite index shed 1.2% to 3,947.34.

In Australia, the S&P/ASX 200 declined 0.3% to 8,777.00.

US stocks ticked higher on Friday after investors showed sustained appetite for winners of the artificial intelligence (AI) boom. The S&P 500 rose 0.4% and the Dow Jones Industrial Average added 0.3%. The Nasdaq Composite climbed 0.3%.

SK Hynix’s shares jumped after trading began at midday after it raised roughly $26.5 billion by selling American depositary shares at a price of $149 each.

SK Hynix’s stock in Seoul had already surged more than 600% over the past year thanks to enthusiasm for AI. The boom has translated into real profits, driven by soaring demand for computer memory. But it has also raised concerns that AI stock prices have climbed too high and that the world’s spending on chips and data centres will not generate enough productivity and profit growth to justify the investment.

That has led to sharp swings in AI stocks, which have become some of Wall Street’s most influential because of their enormous market values.

Nvidia was the single biggest force lifting the S&P 500 on Friday, rising 4%.

Beyond the uncertainty surrounding AI, investors are turning their attention to the upcoming corporate earnings season.

Companies across industries will need to deliver strong profit growth to justify their elevated share prices, which remain close to record highs. This week will bring earnings reports from many of the biggest US banks, including Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs and Wells Fargo, with several reporting on Tuesday alone.

Concerns about how the continued fighting with Iran will affect the global flow of crude oil are clouding the outlook for both energy costs and overall inflation.

High bond yields have been weighing on financial markets worldwide because more expensive oil and persistently high inflation could prompt the Federal Reserve and other central banks to raise interest rates.

Higher interest rates can help keep inflation under control, but they also slow economic growth and weigh on the prices of all kinds of investments.

Additional sources • AP

Published on
10/07/2026 – 13:58 GMT+2

Global oil demand will fall by one million barrels a day in 2026, the IEA said on Friday, making it the first annual contraction since 2020, when Covid lockdowns grounded aviation and shuttered industry.

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The comparison flatters this year’s decline in one respect, since demand collapsed by around eight million barrels a day at the height of the pandemic, but it underlines how severely the closure of the Strait of Hormuz has damaged the global economy.

The contraction is “highly skewed in both product and regional terms”, the agency noted in its monthly report.

Earlier IEA analysis traced the sharpest losses to Asia’s import-dependent economies and to petrochemical feedstocks such as naphtha and liquefied petroleum gas, whose supply chains run through the Strait of Hormuz.

At the time of writing, the front month contract on Brent crude, the international benchmark, was trading at around $76 a barrel, roughly 6% higher than before the US and Israel launched strikes on Iran in late February, and far below the peaks near $120 reached in March at the height of the conflict.

The US benchmark, WTI, was trading lower at around $72 a barrel.

June’s fragile rebound

Supply improved sharply last month, if from a desperately low base.

Global production jumped by 4.1 million barrels a day in June to 98.8 million as the partial reopening of the Strait of Hormuz allowed Gulf producers to restart shut-in wells, though output was still running 9.4 million barrels a day beneath its pre-war level.

Gulf exports, counting cargoes rerouted around the strait, climbed by 6.5 million barrels a day to 16.1 million. Before the fighting began in late February, the region shipped an average of 24 million barrels.

Global oil inventories grew for the first time since US and Israeli strikes on Iran ignited the conflict, halting months of record drawdowns, although stockpiles in the wealthiest economies shrank further as buyers held back from importing.

The truce unravels

The IEA’s forecasts rest on an assumption now under visible strain which is that a ceasefire holds and the Strait of Hormuz gradually reopens.

On that basis, global supply would contract by 3.7 million barrels a day this year, leaving production 860,000 barrels a day short of demand, before expanding by 7.5 million next year and tipping the market into surplus.

Stronger output elsewhere and weaker demand than expected before the war could still restore a surplus by the end of the year, allowing countries to rebuild depleted reserves, the IEA noted.

This week brought the second and far larger breach of last month’s truce.

After Iranian forces struck three commercial vessels on Monday and Tuesday, US Central Command hit more than 80 targets across Iran, including air defences, coastal radar and over 60 Revolutionary Guard small boats, while Washington revoked the licence permitting Iranian oil exports.

Iran fired drones and missiles at Bahrain and Kuwait, causing no major damage, and US President Donald Trump has since declared the ceasefire over.

Tehran insists the only safe passage is the route it sets in the Strait of Hormuz as traffic fell to 13 tankers on Wednesday, against an average of 33 a day the previous week, according to shipping data from Kpler.

Additional sources • AFP

The second half of the year rests on a delicate chain of dominoes, according to a new briefing from Oxford Economics, and whether the US-Iran peace agreement holds is the factor that determines how the rest fall.

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“Its durability will determine whether the global economy gets an energy-driven disinflation tailwind or absorbs a second oil shock,” stated chief global economist Ryan Sweet in the report, calling the deal “the key domino that will determine whether other risks are amplified or dampened”.

The consultancy expects the global economy to accelerate, forecasting annualised growth of 3.1% in the second half against an estimated 1.6% in the first, powered chiefly by cheaper oil feeding through to household incomes, although Sweet puts the odds of reaching a durable deal at “a coin flip”.

If the truce holds, Oxford Economics sees Brent crude averaging in the low $70s per barrel, easing inflation and financial conditions across emerging markets and tech valuations.

If it breaks, the consequences would not stay contained to the oil market.

Early on Wednesday, the US military attacked Iran after it said Tehran struck three ships in the Strait of Hormuz. Iran retaliated with strikes targeting Bahrain and Kuwait. The regional crossfire raised the risk that the interim agreement to halt fighting in the war could break down. However, the exchange of fire followed a pattern of similar attacks during the deal’s shaky ceasefire, and neither country immediately signalled it would step away from the negotiating table.

Oil prices reacted to the attacks by increasing more than 3% by Wednesday morning, with international benchmark Brent trading above $76 a barrel.

“A peace deal breakdown won’t just raise oil prices, it would also increase pressure on AI supply chains in Asia, force central banks to be hawkish, tighten financial conditions, and could shift the outcome of the US midterms and Israeli elections […] the cascade runs fast,” Sweet stated.

A coinflip with a $20 spread

Not everyone shares Oxford Economics’ outlook for oil prices.

Morgan Stanley’s mid-year outlook, published in May, forecast crude climbing back to roughly $90 a barrel by the end of the year, a gap of some $20 compared with Oxford Economics’ forecast that amounts to two different bets on the same peace process.

The World Bank is also more cautious, forecasting Brent crude to average about $94 a barrel this year while warning that global GDP growth will slow to 2.5% in 2026.

Reflecting on how the recent exchange of attacks is testing the fragile truce, Sweet said, “Traffic through the Strait of Hormuz is a good bellwether. The deal committed to fully restoring traffic through the chokepoint within 30 days, making mid-July the first hard deadline,” he explained.

“A sustained return to 75% or more of pre-war traffic by mid-July would increase the odds that the agreement is holding and vice versa,” Sweet concluded.

The other indicator, he says, is whether Iran formally invokes the accord’s Lebanon clause over Israeli strikes, and whether its response comes in military or rhetorical form.

Tariffs, trade and AI

Trade is another risk that could reshape the outlook.

US Section 122 tariffs are due to expire on 24 July, but Washington has already lined up replacement levies under Section 301. Oxford Economics expects the changes to push effective tariff rates higher from late July as the US seeks to maintain monthly tariff revenues of between $25 billion (€21.8bn) and $30 billion (€26.2bn).

Europe is also taking a tougher stance. The European Commission has more than 50 trade-defence investigations open against China, up from 17 a year ago, and plans to unveil a broader economic security strategy by September.

These trade tensions also feed into the AI boom that has powered financial markets this year.

Oxford Economics notes the US AI industry depends heavily on semiconductors and other hardware shipped from Northeast and Southeast Asia, the regions with the most to lose from any further disruption to commodities passing through the Strait of Hormuz.

Meanwhile, the Bank for International Settlements (BIS), the umbrella body for central banks, warned that the AI boom increasingly rests on opaque “circular financing” between chipmakers, cloud giants and artificial intelligence labs, as well as lightly regulated private credit, where lending to the sector has quadrupled in five years.

The BIS’s Asia-Pacific chief, Zhang Tao, cautioned that the sector’s reliance on non-bank funding means an AI downturn could trigger a sharper and faster correction than a traditional banking crisis.

Sweet modelled what such a reversal could look like.

“We have created a so-called tech bust scenario where US technology stocks fall by 25% over the course of a year,” he told Euronews.

According to Sweet, such a shock would cause the US economy to “grind to a halt”, spilling over to technology exporters and investor sentiment worldwide, leaving global growth 1.1 percentage points below Oxford Economics’ baseline next year.

Central banks, ballots and the calendar

The final dominoes are policy and politics.

Oxford Economics expects the major central banks to prove more dovish than financial markets currently anticipate, though they could pivot quickly if traffic through the Strait of Hormuz falters or AI-input prices signal supply stress.

The nearest test is the Federal Reserve’s rate decision under chair Kevin Warsh later this month, coming on the heels of June’s soft jobs report.

Beyond that lie November’s US midterms and Israel’s general election, due by late October, both of which could influence the Middle East peace process. In September, German state elections could also test the coalition behind Germany’s fiscal policy, a key driver of the eurozone economy.

Oxford Economics also flags genuine upside, from stronger AI-driven productivity to an EU economy that weathered the second quarter surprisingly well.

Whether the resilience in Europe is real will show up first in Germany and in credit data, Sweet argues.

“If corporates were absorbing margin compression from the jump in energy prices without cutting investment and drawing down credit lines, that would strengthen the case that underlying momentum in the economy is better than we expected,” he told Euronews, adding that a contraction in eurozone bank lending would push the other way.

It is important to highlight that the typical Oxford Economics forecast miss is nearly a full percentage point, and the range around this assessment in particular is wider than usual.

Published on
22/06/2026 – 8:15 GMT+2

At the time of writing, Brent crude was down 0.91% at $79.12 a barrel, while US West Texas Intermediate (WTI) crude had fallen 0.70% to $75.32 a barrel.

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Lower crude prices reflected broader investor sentiment in early trading after Qatari and Pakistani mediators said the first round of negotiations between the US and Iran aimed at securing a final agreement to end the conflict had concluded with “encouraging progress”.

A memorandum of understanding signed last week includes a commitment to reach a final agreement within 60 days, an end to fighting on “all fronts” – including in Lebanon – and the reopening of the Strait of Hormuz.

Markets mixed as analysts monitor US-Iran negotiations

Meanwhile, Asian stocks were mixed on Monday, with markets in Japan and South Korea trading higher, while US futures traded lower.

Tokyo’s Nikkei 225 jumped 1.6% to 72,364.82 after reaching a new all-time high of 72,831.73 during intraday trading, helped by technology stocks fuelled by enthusiasm over the global artificial intelligence boom.

Japan’s SoftBank Group, the multinational investment holding company with a strong AI focus, rose 2.4%, while chip equipment maker Tokyo Electron gained 2.3%.

South Korea’s Kospi added 0.4% to 9,084.37 and was trading near record highs, led by AI-related shares. Memory chip maker SK Hynix surged 4.7%.

“We’re seeing another strong market today,” Neil Newman, managing director and head of strategy at Astris Advisory Japan, said. He cautioned that the Japanese market was “probably getting a little stretched” from an investor’s point of view, “especially with what’s going on in the Middle East”.

Hong Kong’s Hang Seng fell 1% to 23,690.86, while the Shanghai Composite Index edged 0.2% higher to 4,098.01.

Additional sources • AP

Oil fell sharply in early trading after US President Donald Trump and his Iranian counterpart, Masoud Pezeshkian, put their names to an initial accord to halt hostilities, a move expected to restore the flow of crude through the Strait of Hormuz, one of the world’s most important shipping arteries.

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At the time of writing on Thursday morning, the front-month contract on WTI, the US benchmark, was down by 2.3% to $75 a barrel, while Brent crude, the international gauge, traded 2% lower at around $78 a barrel.

Both remain above the roughly $70 level seen before the conflict, but they have fallen well below the peaks of more than $100 reached only weeks ago.

The deal sets a 60-day window for the two sides to negotiate a final settlement on Iran’s nuclear programme, with Tehran agreeing in the interim to dilute its stockpile of highly enriched uranium.

Crucially for energy markets, it lifts US-backed sanctions, allowing Iran to resume selling its oil freely, and clears the way for tankers to move crude out of the Persian Gulf once more.

US President Donald Trump has said the strait will be fully open by Friday and operate without transit charges, a pledge that has encouraged traders to bet on easing supply pressures.

After signing the memorandum of understanding, Trump stated, “oil down, stocks up”, with hand motions.

An oil market still running on depleted reserves

The optimism arrives against a strained backdrop.

In its June Oil Market Report, the International Energy Agency said strategic oil reserves across advanced economies had slipped to their lowest level since 1990, with government stockpiles in OECD countries down by 163 million barrels since the conflict began as emergency releases accelerated.

The agency also trimmed its outlook for global demand, which it now expects to contract through 2026 as elevated fuel prices and supply disruptions bite, before recovering next year.

It cautioned that any rebound in supply may be gradual, citing the slow clearance of mines and continued disruption to shipping routes even with the interim deal in place.

Flows through the Strait of Hormuz had already begun to recover, rising from a May low to around 12 million barrels a day in early June.

Stocks mixed after the Fed signals possible hikes

Equities offered a patchier picture following Wednesday’s losses on Wall Street, where the S&P 500 fell 1.2% after fresh Fed projections showed nearly half of policymakers expect at least one interest rate hike this year.

The Dow Jones Industrial Average shed 1%, and the Nasdaq Composite slid 1.3%.

In his first press conference as Fed chair, Kevin Warsh declined to forecast where rates would end the year and signalled a rethink of how the central bank communicates, dropping the customary hints about future policy direction from its statement.

US President Donald Trump, who had long pressed Warsh’s predecessor to cut rates, was unusually relaxed about the outcome.

“It’s all right. Whatever,” Trump told reporters in France as he attended the G7 meeting.

Asked about the prospect of a hike, he said it was “hard to believe” but that, with Warsh now in place, he was “guided by what he wants.”

US stock futures pointed higher early on Thursday, with contracts on the S&P 500 up 0.9% and on the Nasdaq Composite around 1.4% higher.

In Asia, Tokyo’s Nikkei 225 and South Korea’s Kospi both jumped 2.3%, helped by hopes for an end to the Iran war and strong demand for technology shares.

European trading was more subdued, with the Euro Stoxx 50 rising 1% but the broader pan-European Stoxx 600 trading flat.

The UK’s FTSE 100, Germany’s DAX 30, Italy’s FTSE MIB, Spain’s IBEX 35, the Netherlands’ AEX, and Switzerland’s CH20 all traded between 0.4% and 0.8% higher than their Wednesday close.

France’s CAC 40 led the pack and jumped roughly 1.3%.

Additional sources • AP

Published on
15/06/2026 – 10:09 GMT+2

Crude prices retreated on Monday as US President Donald Trump confirmed a peace agreement with Iran and both sides announced a lifting of their respective blockades of the Strait of Hormuz.

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At the time of writing, the front month contract on US West Texas Intermediate (WTI) crude was down almost 6% from Friday’s close to roughly $80 per barrel, while Brent crude, the international standard, dropped around 5% to about $83 per barrel.

The specific concessions made by each side are still unclear and there are questions surrounding whether the Prime Minister of Israel will respect the withdrawal of troops from southern Lebanon, which, according to the Prime Minister of Pakistan is included in the deal.

Benjamin Netanyahu has yet to publicly address the US-Iran deal, or the issue of Lebanon, and CNN has reported that the Prime Minister of Israel is seeking an urgent meeting with US President Donald Trump after this week’s G7 summit.

Nonetheless, markets are reacting swiftly to the prospect of the Strait of Hormuz slowly reopening and the potential that the Iran war is closer to ending than reigniting.

The freshly announced peace deal is currently expected to be signed on Friday.

European, Asian and US markets

At the open, European markets also rose on the news that there is meaningful progress in ending the Iran war.

Both the Euro Stoxx 50 and the broader pan-European Stoxx 600 traded over 1% higher at the start of Monday’s session.

The UK’s FTSE 100, Germany’s DAX 30, Italy’s FTSE MIB, Spain’s IBEX 35, the Netherlands’ AEX and Switzerland’s CH20, all traded between 0.5% and 1% higher than their Friday close.

France’s CAC 40 led the pack and rose almost 1.5%.

In the US, S&P500 futures traded over 2% higher and the teach-heavy Nasdaq 100 rose more than 3%.

In other trade dealings on Monday, Asia-Pacific markets jumped overnight with South Korea’s Kospi climbing over 5%, recovering from a 4% drop on Friday, while Japan’s Nikkei 225 also traded roughly 3% higher.

Australia’s S&P/ASX 200 rose 0.8%, while Hong Kong’s Hang Seng Index jumped about 0.5% and Shangai’s SSE climbed over 1.5%.

Brent crude edged 2.5% higher on Tuesday and seems to have steadied around $100 per barrel at the time of writing, as US-Iran negotiations stall.

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On the other hand, WTI dropped over 4% and is trading around $92.6 per barrel.

Overall, oil prices were declining since last Wednesday as the framework for a peace deal, or at least a longer and more encompassing ceasefire, between the US and Iran was seemingly on the verge of being agreed.

However, Iran accused the US of breaching the current ceasefire after Washington carried out what it described as defensive strikes in the southern part of the country.

Iran’s foreign ministry stated that the US attacks in the Hormozgan province, where Iranian media reported hearing explosions early Tuesday, amounted to a “serious violation” of the fragile ceasefire that has been in effect for almost seven weeks.

Meanwhile, US Secretary of State Marco Rubio said negotiations aimed at ending the conflict could require “a few days” to reach an agreement.

On Monday, US President Donald Trump also reiterated nuclear demands in a social media post, as tensions continue to surround the fundamental aspects of a possible agreement.

Investors appear to have mixed reactions to the developments with some markets seeming to price in a decrease in the probability that a deal is imminent.

In Europe, the Euro Stoxx 50 has fallen more than 0.7% while the broader pan-European Stoxx 600 is trading around 1% lower as we approach the close of Tuesday’s session.

The UK’s FTSE 100, Germany’s DAX 30, France’s CAC 40, Italy’s FTSE MIB, the Netherlands’ AEX and Switzerland’s CH20 have all dropped between 0.1% and 0.7%.

Over in Asia, Japan’s Nikkei 225 and Taiwan’s TAIEX closed flat, but South Korea’s KOSPI jumped 2.5% primarily driven by a continuous demand for AI-related equities.

However, US markets appear completely decoupled from other indices and the broader situation. Not only have WTI prices continued to fall on Tuesday but the S&P 500 also opened 0.6% higher.

Latest on the Strait of Hormuz

Both the US and Iran had signalled headway toward a memorandum of understanding that could end the conflict and resume maritime traffic through the blocked Strait of Hormuz, while allowing negotiators a 60-day window to tackle more complicated matters such as Iran’s nuclear activities and supplies.

In his latest remarks, US Secretary of State Marco Rubio stated that the Strait of Hormuz must remain accessible “one way or the other” as traffic through the chokepoint has dropped sharply, with only a few dozen ships currently using the route each day, compared with the usual 125 to 140 vessels.

Iran has continued to permit limited shipping, prioritising vessels connected to allied or friendly nations and arranging passage through state-to-state agreements.

Continuous reports of attacks in the Strait of Hormuz underscore how far from the normalisation of energy flows and other supplies the global economy still is.

On Tuesday, the United Kingdom Maritime Trade Operations (UKMTO) reported that a tanker experienced an external blast near the waterline on its port side.

According to the agency, the vessel was located about 60 nautical miles from Muscat, the capital of Oman.

UKMTO said the tanker and all crew members were unharmed, although a quantity of bunker fuel spilled into the sea.

This is the most recent reported incident near the Strait of Hormuz at the time of writing.

Published on 11/05/2026 – 7:59 GMT+2•Updated
8:11

Oil prices surged in early trade as investors digested the latest developments in the Middle East, with both Brent and US crude climbing over 4%.

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It comes after Trump’s rejection of Tehran’s response to the latest US proposition on bringing the conflict in Iran, and subsequent impact on trade passing through the Strait of Hormuz, to an end.

In other trading, US futures edged lower, while Tokyo’s Nikkei 225 fell 0.4% to 62,486.84 after briefly reaching another record high in intraday trading at above 63,300.

South Korea’s Kospi gained 4.1% to 7,804.71. It also hit an all-time intraday high, led by gains from tech-related stocks including Samsung Electronics and memory chip maker SK Hynix.

Technology-related stocks and growing artificial intelligence-related interest have supported markets in Japan and South Korea despite the Iran war, with the Nikkei 225 and Kospi rising more than 10% and 30%, respectively, over the past month.

Meanwhile, Donald Trump will head to China this week for talks with his counterpart, Xi Jinping. The two leaders are expected to discuss a wide range of topics, including trade concerns.

Published on
05/05/2026 – 7:12 GMT+2

Oil prices fell back in early trade but remained elevated as investors kept an eye on escalating tensions between the US and Iran and progress on ships passing through the Strait of Hormuz.

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At the time of writing, Brent crude was trading 1.38% lower at $112.86 while US crude, or WTI, was down 2.27% at $104 per barrel. US futures edged 0.1% higher.

Elsewhere, regional trading was thin overnight with markets in Japan, South Korea and mainland China closed for holidays.

Hong Kong’s Hang Seng fell 1.1% to 25,805.98. Australia’s S&P/ASX 200 lost 0.5% to 8,649.80, while Taiwan’s Taiex traded 0.2% lower at 40,626.22.

The fragile ceasefire between the US and Iran was tested on Monday after the US military said it had sank six Iranian small boats targeting civilian ships, while two US-flagged ships successfully passed through the Strait of Hormuz.

The key waterway for oil and gas transport remains largely closed despite repeated demands from the US for Iran to reopen the strait and as the United States imposed a sea blockade on Iranian ports. US President Donald Trump’s “Project Freedom” plan under which the United States would help guide stranded ships through the Strait of Hormuz began on Monday.

Brent crude, the international standard, surged above $114 a barrel on Monday, gaining nearly 6%. Before the war began in late February, it was trading near $70.

Published on
04/05/2026 – 7:15 GMT+2

Crude prices were slightly lower ahead of European markets opening as traders digested comments from US President Donald Trump that Washington would help ships leave the Strait of Hormuz from today. Iran, however, has rejected the plan.

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At the time of writing, the price of a barrel of US benchmark crude (WTI) was down 0.28% to $101.65 a barrel, while Brent crude, the international standard, edged down 0.06% to $108.10 a barrel.

Much hinges now on progress towards ending the war with Iran and unlocking the bottleneck through the Strait of Hormuz.

The oil market “remains the fulcrum, with hundreds of tankers, bulk carriers, and cargo ships still stranded across the Gulf, idling as storage constraints force producers to shut … production simply because there is nowhere left to store it,” Stephen Innes of SPI Asset Management said in a commentary note.

Trump said what he called “Project Freedom” would begin Monday morning in the Middle East. The US Central Command said it would involve guided-missile destroyers, more than 100 aircraft and 15,000 service members, but the Pentagon did not immediately answer questions about how they would be deployed.

Asia-Pacific and US markets

In Asian share trading overnight, Hong Kong’s Hang Seng jumped 1.4% to 26,135.47. Markets in mainland China and Japan were closed for “Golden Week” holidays. In Australia, the S&P/ASX 200 slipped 0.3% to 8,704.70.

Strong buying of tech stocks pushed shares in South Korea sharply higher, as the Kospi gained 3.8%. Taiwan’s Taiex surged 4.2%.

On Friday, the S&P 500 climbed 0.3% to another all-time high of 7,230.12, closing out a fifth straight winning week. The Dow Jones Industrial Average dipped 0.3% to 49,499.27, and the Nasdaq composite added 0.9% to a record close of 25,114.44.

Apple led the way after delivering better profit than expected. Because it’s one of Wall Street’s biggest stocks in terms of overall size, its rally of 3.3% was by far the strongest force lifting the S&P 500.

Stock prices generally follow the path of corporate profits over the long term, and US companies have been exceeding expectations for earnings in the first three months of 2026. That’s even with the war with Iran and high oil prices souring confidence for many US households.

Strong earnings boost S&P 500

A little more than a quarter of the companies in the S&P 500 have reported already, and 84% of them have topped analysts’ estimates, according to FactSet. The index is on track to deliver roughly 15% growth in profit from a year earlier.

The main uncertainty for the global economy is where oil prices are heading because of the Iran war. Oil prices moved higher last week on worries that the war might keep the Strait of Hormuz closed for a long time, trapping oil tankers pent up in the Persian Gulf instead of delivering crude to customers worldwide.

Brent was selling for a little more than $70 per barrel before the war began, and soaring prices helped the two biggest U.S. oil companies report stronger profit for the latest quarter than analysts expected. But stock prices nevertheless fell for both Exxon Mobil, 1%, and Chevron, 1.4%, as oil prices regressed Friday and each reported drops in net income from a year earlier.

In other dealings early Monday, the dollar rose to 157.18 Japanese yen from 156.80 yen. The euro fell to $1.1724 from $1.1746.

Published on 30/04/2026 – 10:17 GMT+2•Updated
10:28

Brent crude, the international standard for oil prices, jumped by over 7% during early trading on Thursday, touching $126 per barrel, the highest intraday level since 2022 when Russia initiated the full-scale invasion of Ukraine.

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The US benchmark crude, WTI, also rose more than 3% and hit over $110 per barrel.

At the time of writing, prices have corrected slightly with the front month contract for Brent trading at around $122 per barrel and WTI at roughly $108.5.

Prices are now the highest they have been since the start of the Iran war.

The surge in oil prices is a direct consequence of stalled negotiations over the reopening of the Strait of Hormuz, the absence of a clear path toward ending the war and a seemingly increased chance of US-Israeli military action returning.

US President Donald Trump is set to meet with the head of the US Central Command, Admiral Brad Cooper, on Thursday and receive a briefing on new military options for action in Iran, according to Axios which cites two unnamed people.

The meeting signals the potential for fresh escalation in the Middle East as the resumption of combat operations is reportedly “seriously under consideration” and oil markets have reacted swiftly to the news.

A ceasefire has held since early April but recent negotiating efforts have fallen flat with the two sides refusing to meet. Meanwhile, the US and Iran both maintain their blockade of the vital Strait of Hormuz.

US Central Command has also reportedly asked for hypersonic missiles to be sent to the Middle East, which would mark the first time the US army has deployed that type of weapon.

The persistent blockade of ports and the threat of expanded combat have fundamentally reshaped market expectations.

A shifting landscape for OPEC and global supply

The spike in prices is occurring against a backdrop of significant structural change within the global oil hierarchy.

Earlier this week, the United Arab Emirates officially withdrew from the Organisation of the Petroleum Exporting Countries (OPEC) and its wider alliance (OPEC+), a move the nation claimed was necessary to prioritise its own national interests.

Under normal market conditions, the exit of a major producer from the cartel might be expected to signal a potential increase in supply or a decrease in price stability.

However, the sheer scale of the Iran war has rendered the UAE’s departure secondary in the minds of traders.

Despite the UAE’s exit, which was expected to potentially weaken OPEC’s grip on production quotas, prices have continued their upward trajectory.

This suggests that the “war premium” currently dominates all other market fundamentals.

Investors are currently less concerned with the internal politics of oil-producing nations and more focused on the immediate physical absence of Iranian crude, suspended shipping routes through the Strait of Hormuz and the threat to regional infrastructure.

However, the transition of the UAE to an independent actor still highlights a growing fragmentation in global energy governance at a time when the world’s energy security is at its most vulnerable.