By ELAINE KURTENBACHAP
Hong Kong, April 20
Oil prices climbed more than 5 per cent on Monday, while Asian stock markets recorded gains, as tensions between Iran and the United States disrupted tanker traffic through the Strait of Hormuz, raising concerns about global oil supplies.
The surge in crude prices followed Iran’s decision to reverse its earlier move to reopen the Strait of Hormuz. At the same time, US President Donald Trump said the naval blockade on Iranian ports would remain in place, adding to uncertainty over the flow of oil from the region.
US benchmark crude rose by 5.6 per cent to USD 87.20 per barrel, while Brent crude increased by 5.3 per cent to USD 95.16 per barrel. The disruption in shipments through the key waterway has raised questions about how quickly global oil supplies can stabilise.
Despite volatility in energy markets, Asian equities moved higher. Japan’s Nikkei 225 gained 1 per cent to 59,045.45, while South Korea’s Kospi rose 1.1 per cent to 6,260.92. Hong Kong’s Hang Seng added 0.8 per cent and the Shanghai Composite index advanced 0.6 per cent. Australia’s S&P ASX 200 remained largely unchanged, while Taiwan’s Taiex rose 1.4 per cent.
Market participants said the recent rally in equities appears to be driven more by sentiment than fundamentals. “The problem for markets is not the absence of hope, it is the overpricing of it,” said Stephen Innes of SPI Asset Management, adding that the upward movement in stocks seems to be momentum-driven.
On Friday, oil prices dropped sharply after Iran indicated that the Strait of Hormuz would reopen to commercial shipping, easing supply concerns and boosting global markets. US stock indices, including the S&P 500, Dow Jones Industrial Average and Nasdaq, had recorded strong gains, with the S&P 500 touching a record high.
However, the optimism weakened after the US reaffirmed its blockade, and tensions escalated further. Reports of the US seizing an Iranian-flagged cargo vessel added to the uncertainty, with Iran terming the action as piracy and signalling a response.
A temporary ceasefire between Iran and the United States is set to expire later this week, adding to concerns in global markets. Since the conflict began, investor sentiment has fluctuated between optimism over a possible resolution and concerns about the broader economic impact. With no immediate resolution in sight and tensions in the Strait of Hormuz continuing, volatility in oil prices and global financial markets is likely to persist in the near term.
