Oil surges past $125 as Iran war fears shake stocks

Oil prices jumped above $125 per barrel on Thursday as stalled talks between the United States and Iran heightened concerns over prolonged disruption in the Strait of Hormuz and the ongoing conflict in the Middle East.

Brent crude for June delivery rose 6.2 percent to $125.36 per barrel, while the July contract gained 3.1 percent to $113.85. US benchmark crude also climbed 2.3 percent to $109.38 per barrel. Before the war began in late February, Brent had been trading near $70.

The conflict, now in its ninth week, shows no clear signs of resolution. The US continues its blockade of Iranian ports, while the Strait of Hormuz remains effectively closed, limiting global oil flows and driving prices higher.

Market sentiment worsened after reports suggested US President Donald Trump rejected Iran’s proposal to reopen the strait, raising fears of further escalation.

Analysts at ING said the breakdown in negotiations has reduced expectations for a quick return of oil supplies to global markets.

Oil prices, which vary depending on crude type and contract terms, are approaching levels last seen during the 2008 global financial crisis, when Brent peaked at $147.50 per barrel.

The geopolitical tensions also boosted the US dollar, which rose to 160.51 yen, its highest level in nearly two years, before settling slightly lower. The dollar has strengthened as investors seek safe-haven assets and as US interest rates remain relatively high.

The Federal Reserve’s decision to keep interest rates unchanged at its latest meeting further supported the currency.

Meanwhile, the euro slipped to $1.1663.

Global stock markets came under pressure amid the rising uncertainty. In Asia, Japan’s Nikkei 225 dropped 1.6 percent, while South Korea’s Kospi fell 1.1 percent.

Hong Kong’s Hang Seng declined 1.3 percent, while China’s Shanghai Composite edged up slightly by 0.1 percent. Australia’s S&P/ASX 200 fell 0.3 percent, Taiwan’s Taiex dipped 0.1 percent, and India’s Sensex lost 1.2 percent.

On Wall Street, US stocks showed mixed performance. The S&P 500 edged down slightly, the Dow Jones Industrial Average fell 0.6 percent, and the Nasdaq Composite was largely unchanged.

Some individual stocks moved higher, with Starbucks rising 8.4 percent and Visa gaining 8.3 percent after reporting stronger-than-expected results.

In bond markets, the yield on the US 10-year Treasury rose to 4.42 percent from 4.36 percent, reflecting investor concerns over inflation and interest rate policy as the global energy crisis intensifies.