Kathmandu [Nepal], July 20 – Crude oil prices climbed to their highest level in more than a month on Monday as escalating military tensions between the United States and Iran raised fears of disruptions to global energy supplies, while Asian stock markets traded mixed amid growing geopolitical uncertainty.
The latest gains were driven by concerns that the conflict could threaten shipping through the Strait of Hormuz a vital waterway that carries roughly one-fifth of the world’s seaborne oil trade.
Global benchmark Brent crude rose above $91 a barrel its highest level since June 11 after both Brent and US benchmark West Texas Intermediate (WTI) gained more than 4% last week.
Oil prices extended their rally after the US launched additional airstrikes on Iranian military targets and Iran responded with attacks on US and allied military assets in the Gulf region.
The surge in energy prices has renewed concerns that inflation could accelerate potentially complicating central banks’ plans to cut interest rates and weighing on the global economic outlook.
Stephen Innes, an analyst at SPI Asset Management said, markets are facing competing forces with geopolitical risks pushing oil prices higher while easing US inflation and a softer labor market reduce the likelihood of a broader inflationary cycle. However, he warned that persistently high oil prices could curb consumer spending and slow economic growth.
Asian equities showed mixed performance. Hong Kong’s Hang Seng Index rose more than 2%, while Shanghai’s benchmark gained 1.32% on expectations that China could introduce fresh economic stimulus measures. Markets in Taipei, Manila and Singapore also advanced.
Meanwhile Seoul, Sydney and Wellington traded cautiously after Wall Street’s three major indexes closed lower on Friday. Despite heightened geopolitical tensions gold slipped 0.40%, while silver gained about 1% in international markets.
