Oil Tops $97 as US-Iran Tanker Clashes Rock Strait of Hormuz, Asian Chip Stocks Rally
Asian markets were mixed on Monday, with chipmaker stocks in Tokyo and Seoul surging while oil prices climbed past $97 a barrel following renewed US-Iran hostilities near the Strait of Hormuz.
Japan’s Nikkei 225 added 1.7%, closing at 66,104.93, while South Korea’s Kospi surged 3.3% to 6,907.53 [236922]. Samsung Electronics rose 4.5%, and memory chipmaker SK Hynix jumped 6.2% [236922]. In contrast, Hong Kong’s Hang Seng fell 1.1% to 25,377.12, and the Shanghai Composite lost 0.2% to 3,920.70 [236922].
Brent crude, the international standard, added 67 cents to $96.95 a barrel, while benchmark US crude rose 61 cents to $92.09 [236922]. Other reports showed Brent topping $97 per barrel and West Texas Intermediate (WTI) reaching $92 as renewed friction between Washington and Tehran stoked supply concerns [236896].
The price surge follows US strikes on three Iranian oil tankers after Iran launched missiles at US warships [236922]. Tehran has announced plans to declare an “exclusion zone” outside the Strait of Hormuz, a narrow passage that carries about one-fifth of the world’s oil supply [236922][236737]. The US military denied Iran’s claim that it struck an uncrewed American vessel in the strait, calling the report a “total lie” [236922].
Traders are pricing in a higher risk of supply cuts, even though no physical barrels have been lost yet [236896]. The strait remains open, but insurers are raising premiums for tankers crossing it, and some firms are rerouting vessels, adding days to delivery times and raising costs [231913].
The oil spike adds fresh pressure on global inflation, as higher energy costs typically translate into more expensive fuel, shipping, and consumer goods [236896]. US markets were closed Monday for Labor Day [236922]. They ended last week lower after the government reported employers added 162,000 jobs last month—more than expected—which could push the Federal Reserve to raise interest rates later this month [236922].
The yield on the 10-year Treasury rose to 4.78% from 4.77% on Friday [236922]. Investors expect the Fed to raise rates before year-end to fight inflation, which remains above 3% [236922]. The Fed’s next policy meeting ends September 16 [236922].
In currency trading, the US dollar was little changed at about 156.22 Japanese yen [236922]. The weak yen remains a concern for Japanese leaders after the dollar surged to the 160 yen level last week before pulling back [236922]. Investors are watching the Bank of Japan’s policy meeting later this month [236922].