Global crude oil benchmarks hovered near $100 a barrel following a sharp surge driven by escalating military conflicts in the Middle East, sending shockwaves through Asian stock markets already pressured by heavy tech losses. According to market data, North Sea Brent crude traded around 99,68 dollars a barrel, while West Texas Intermediate (WTI) stood at 91,29 dollars a barrel, retaining the bulk of a more than 6% rally recorded in the prior session.
Middle East Conflict Drives Oil Surge and Supply Fears
The latest market volatility follows a new series of military strikes launched by the United States in Iran, alongside coordinated actions by Houthi allies in Yemen who have opened a second front by claiming attacks in the Red Sea. According to Bob McNally of Rapidan Energy Group, cited by Bloomberg, the renewed military clashes risk causing durable blockages to global hydrocarbon exports. McNally noted that the second round of the conflict is expected to be more extensive than the first, carrying considerable risks for both maritime transport and critical energy infrastructure.
Market anxieties are compounded by the strategic importance of the Strait of Hormuz, currently locked by Iran, and Houthi announcements of a blockade targeting vessels from Saudi Arabia, the world’s leading crude exporter. These supply choke points have kept oil prices anchored near the psychological $100 threshold, a level breached for the first time since May.
Asian Markets Tumble on Energy and Tech Pressures
Asian stock exchanges retreated uniformly as surging energy costs squeezed import-dependent economies, compounded by a sharp downturn in the technology sector. At the Tokyo Stock Exchange, the Nikkei index dropped 3% to close at 64.414 points, while Seoul’s Kospi index tumbled 3,78%. Additional losses hit regional boards, with Sydney falling 0,55%, Taipei declining 0,83%, and Hong Kong’s Hang Seng index losing 1,13%.
The market sell-off was exacerbated by earnings reports from American tech giants Alphabet and Tesla, which heightened investor concerns over artificial intelligence profitability timelines. Alphabet shares fell nearly 7% on Wall Street despite reporting strong cloud revenue growth, as investors focused on escalating capital expenditures dedicated to AI infrastructure. This sentiment dragged down major semiconductor stocks in Tokyo and Seoul, with South Korean memory chip leaders Samsung Electronics and SK hynix both plunging more than 4%.
Despite the sharp pullbacks, some market analysts view the tech sector reaction as overstated. Kathleen Brooks, an analyst at XTB, observed that major cloud providers are poised to increase their capital spending through the end of the year, with a significant share directed toward semiconductors and memory chips.
Yen Hits 40-Year Low Amid Currency and Energy Strains
In currency markets, the Japanese yen stabilized around 163.79 yen per dollar after sinking to roughly 164 yen, marking its weakest level against the greenback since 1986. The Japanese currency remains weighed down by persistent interest rate differentials between Japan and the United States, despite monetary tightening signals from the Bank of Japan (BoJ).
The yen faces additional downward pressure from rising oil prices, which are denominated in dollars and weigh heavily on resource-poor Japan. This sharp depreciation has fueled market speculation regarding potential currency intervention by Japanese authorities. Meanwhile, press reports indicate that Tokyo is considering measures to encourage domestic pension funds to expand their investments in Japanese financial assets.
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