WEBDESK - NAYADAUR
Oil prices climbed toward $100 a barrel on Wednesday as escalating fighting across the Middle East weighed on Asian stocks and revived concerns about inflation, energy supplies and interest rates.
Brent crude futures rose $1.10 to $99.02 a barrel, while U.S. West Texas Intermediate crude gained 93 cents to $93.95. Brent has now risen for four consecutive sessions as traders assess the growing risks to oil production and shipping routes.
The latest market moves followed a series of attacks involving Iran, the United States, Saudi Arabia and Yemen’s Iran-backed Houthis.
The Houthis launched attacks on several Saudi cities on Tuesday, while U.S. forces struck Iranian oil tankers. Iran also attacked a U.S.-linked military base in Jordan, adding to fears that the conflict could spread further across the region.
The renewed violence has increased pressure on global energy markets, particularly because of threats to shipping around the Strait of Hormuz and the Red Sea.
The Strait of Hormuz is a crucial energy corridor, and prolonged disruption could further tighten global oil supplies. Investors are also watching developments around the Red Sea, where Houthi attacks have previously disrupted commercial shipping.
Asian stock markets were mixed on Wednesday.
Japan’s Nikkei fell 0.2%, while Hong Kong’s Hang Seng declined 0.3%. Mainland Chinese blue-chip stocks were little changed.
Some technology markets performed better. South Korea’s KOSPI rose 1.2%, helped by gains in chip and artificial intelligence stocks, while Taiwan’s TAIEX added 0.2%.
Wall Street also remained under pressure. The S&P 500 fell 0.6% on Tuesday, although futures were slightly higher on Wednesday.
Market analysts said investors were struggling to determine the next direction for major asset classes as geopolitical risks and inflation concerns increased.
Brent crude has become a closely watched indicator of market sentiment, with analysts warning that a move above $100 a barrel could have wider economic consequences.
Higher energy prices could feed directly into inflation, making it harder for central banks to ease monetary policy. Investors are therefore closely watching upcoming U.S. consumer price data, due Friday, for signs of how rising energy costs are affecting inflation expectations.
Currency markets also reflected shifting expectations.
The Japanese yen strengthened about 0.5% to 153.32 per dollar, moving closer to a nearly seven-month high reached in the previous session. The yen has gained sharply in recent sessions as traders increased bets on faster interest-rate hikes by the Bank of Japan.
The euro edged 0.1% higher to $1.1634 ahead of the European Central Bank’s policy decision on Thursday. Markets are widely expecting a quarter-point rate increase amid persistent inflationary pressures linked to the war.
Gold, traditionally viewed as a safe-haven asset during periods of uncertainty, rose 0.7% to around $4,385 an ounce.
The market reaction highlights how the widening Middle East conflict is increasingly affecting the global economy. Continued attacks on energy infrastructure and shipping could push oil prices higher, intensify inflationary pressure, and complicate monetary policy decisions in major economies.
For investors, the immediate focus remains on whether the regional escalation continues and whether disruptions to Gulf and Red Sea energy routes become prolonged.