Global financial markets were jolted on Tuesday as escalating conflict in the Middle East sent oil prices sharply higher while Asian stock markets retreated amid renewed uncertainty over energy supplies and a broad sell-off in technology shares.
Brent crude climbed above $84 a barrel, extending Monday’s near 10% rally, while U.S. benchmark West Texas Intermediate rose 1.4% to $79.20 a barrel, reflecting growing fears that the conflict could disrupt one of the world’s most critical oil supply routes.
Although crude prices remain well below the wartime highs of nearly $120 a barrel, investors are increasingly concerned about the stability of global energy markets as the United States and Iran continue to exchange claims over control of the strategically vital Strait of Hormuz.
Market jitters intensified after U.S. President Donald Trump announced that Washington was “reinstating” a blockade on Iran in the waterway, followed by reports of fresh U.S. military strikes. The Strait of Hormuz, through which roughly one-fifth of the world’s oil supply passes, has become the focal point of investor anxiety as fighting in the region disrupts tanker movements and threatens global fuel supplies.
The geopolitical uncertainty weighed heavily on investor sentiment across Asia. Japan’s Nikkei 225 dropped 1% to 66,574.96, while South Korea’s Kospi tumbled 3.2% to 6,589.37, with artificial intelligence and technology shares leading the losses.
China’s Shanghai Composite Index fell 0.8% to 3,884.32, shrugging off surprisingly strong trade data that showed exports surged 27% year-on-year in June. The impressive export growth was driven largely by soaring global demand for semiconductors and other advanced technology products as artificial intelligence adoption continues to accelerate.
Hong Kong’s Hang Seng Index bucked the regional trend, edging 0.1% higher to 24,230.46, while Australia’s S&P/ASX 200 slipped 0.5% to 8,767.00, reflecting cautious trading as investors weighed geopolitical risks against resilient economic fundamentals.
Meanwhile, U.S. stock futures pointed to a weaker Wall Street open, with futures for major indexes falling about 0.3% as investors assessed the potential economic fallout from rising oil prices and escalating military tensions.
Analysts warn that if disruptions in the Strait of Hormuz persist, energy costs could climb further, fueling inflationary pressures, squeezing corporate profit margins and complicating the outlook for central banks already navigating an uncertain global economy.
For now, markets remain firmly focused on developments in the Middle East, where every new military escalation has the potential to send fresh shockwaves through global commodity and financial markets.
