Oil prices rose while global stocks declined on Wednesday as renewed attacks in the Strait of Hormuz heightened fears over Middle East oil supplies.
The increase came after UK Maritime Trade Operations reported nine attacks so far this month, equal to half the number recorded across the waterway and the Gulf in September.
Brent crude climbed 0.7 per cent to $101.23 a barrel, while West Texas Intermediate rose 0.5 per cent to $89.88. The move followed a recent decline that had pushed Brent below $100 and WTI below $90 as exports from the Middle East, excluding Iran, recovered towards pre-war levels.
However, concerns over the safety of oil tankers in the Strait of Hormuz reversed some of that easing. Reports indicated that Iran had increased attacks on tankers passing through the strategic waterway.
The Strait of Hormuz is a critical global energy route, making any disruption there a major concern for oil markets and the wider global economy.
“Reports of increased flows across the region have offered some downside pressure on crude, but this has been offset by varying reports around the scale of attacks on vessels moving through the Strait,” Chris Weston of Pepperstone said, according to AFP.
“For now, the market remains highly sensitive to headlines and geopolitical risk.”
Stocks retreat
Asian and European stocks also came under pressure as investors assessed the renewed geopolitical risks.
Tokyo’s Nikkei 225 fell 0.9 per cent, while Hong Kong’s Hang Seng Index dropped 0.6 per cent. London’s FTSE 100 was down 0.5 per cent, with markets in Paris and Frankfurt also declining.
The falls came a day after US markets reached fresh records, driven largely by renewed enthusiasm for artificial intelligence stocks.
The Nasdaq and S&P 500 gained as investors increased their exposure to technology companies, with Nvidia’s market value approaching $5.7 trillion.
Investors were also encouraged by reports that SpaceX was considering raising $40 billion to purchase Nvidia chips, according to the Financial Times.
Meanwhile, concerns over inflation remain as the Middle East crisis continues to put pressure on energy prices. India’s central bank raised interest rates for the first time in more than three years, citing inflationary pressures.
The latest developments have added to uncertainty in global markets as traders monitor the security of key oil routes and the wider Middle East conflict.
