Fragile ceasefire and disruptions around Hormuz continue to keep global energy markets on edge.
Oil prices surged on Friday after Iran said it would not reopen the Strait of Hormuz — a key route for around one-fifth of global oil shipments — as long as the United States continues blocking access to its ports.
US crude benchmark WTI rose 1.23% to $97.03 a barrel in early trading, while Brent crude, the international benchmark, climbed 1.26% to $106.4 a barrel.
The latest market reaction followed days of shifting expectations over the strategic waterway.
Iran, which effectively controls the strait, had earlier indicated on Friday that it would fully reopen the route to commercial shipping, triggering a sharp drop of more than 10% in crude prices. However, it later reversed that position on Sunday, reigniting supply concerns and pushing prices higher again.
On Thursday (April 23), global stocks mostly declined, pulling back from recent gains as investors scaled back hopes for a swift end to the Middle East conflict.
The rise in Brent North Sea crude above the psychologically significant $105-per-barrel mark revived concerns over broad-based inflation, raising fears that higher energy costs could slow economic growth worldwide.
Wall Street’s main indexes closed lower after a volatile trading session, joining most markets across Europe and Asia in retreating from recent gains.
According to Art Hogan of B. Riley Wealth Management, US investors were more focused on elevated oil prices on Thursday than in recent days, especially as markets had been climbing steadily since late March.
“There’s still a tug of war between the fundamentals, the earnings that have been better than expected so far, and the fact that the news coming out of the Strait of Hormuz has not become more constructive,” Hogan said.
Despite an extension of the fragile ceasefire, the United States and Iran appeared no closer to restarting meaningful peace talks.
Strong first-quarter corporate earnings and continued enthusiasm around artificial intelligence have helped support equities this week, but analysts warn that a prolonged Middle East conflict could quickly undermine investor confidence.
In Europe, business activity in the eurozone contracted for the first time in 16 months in April, as the war in the Middle East pushed energy prices higher and disrupted global supply chains, according to the closely watched Flash Eurozone Purchasing Managers’ Index (PMI) released by S&P Global.
“The eurozone is facing deepening economic woes from the war in the Middle East, presenting a major headache for policymakers,” said Chris Williamson, chief business economist at S&P Global.
“The conflict has pushed the economy into decline in April, while driving inflation sharply higher.”
However, France’s CAC 40 managed to edge higher, supported largely by cosmetics giant L’Oréal, whose shares surged after reporting a 3.6% rise in sales, driven by strong growth in its professional and dermatological products divisions.
Meanwhile, Meta Platforms plans to cut around a tenth of its workforce — roughly 8,000 employees — while leaving thousands of other roles unfilled next month, a source told AFP. Its shares fell 2.3%.
The latest round of US corporate earnings triggered a mixed market reaction: shares of Tesla fell 3.6%, while Lockheed Martin dropped 4.7%. In contrast, American Airlines gained 2.4%.
In Asia, Seoul defied the broader market weakness, with the KOSPI hitting a record high as a renewed rally in technology shares continued to drive gains this year.
Key figures at 2015 GMT:
Brent North Sea Crude: up 3.1% at $105.07 a barrel
West Texas Intermediate: up 3.1% at $95.85 a barrel
New York – Dow Jones Industrial Average: down 0.4% at 49,310.32 (close)
New York – S&P 500: down 0.4% at 7,108.40 (close)
New York – Nasdaq Composite: down 0.9% at 24,438.50 (close)
London – FTSE 100: down 0.2% at 10,457.01 (close)
Paris – CAC 40: up 0.9% at 8,227.32 (close)
Frankfurt – DAX: down 0.2% at 24,155.45 (close)
Tokyo – Nikkei 225: down 0.8% at 59,140.23 (close)
Hong Kong – Hang Seng Index: down 1.0% at 25,915.20
Shanghai – Shanghai Composite: down 0.3% at 4,093.25 (close)
Euro/dollar: down at $1.1684 from $1.1705
Pound/dollar: down at $1.3465 from $1.3502
Dollar/yen: up at 159.72 yen from 159.48 yen
Euro/pound: up at 86.76 pence from 86.69 pence
