HONG KONG (AP) - Oil prices surged above $97 a barrel as Asian stock markets experienced declines on Thursday, amid growing concerns regarding a fragile ceasefire between the United States and Iran. Investors expressed skepticism about the sustainability of a two-week ceasefire following a series of lethal Israeli strikes in Lebanon, which resulted in significant casualties.
In response to the ongoing violence in Lebanon, Iran reclosed the Strait of Hormuz, a vital chokepoint for global oil transportation. This move heightened tensions and prompted further apprehension in the markets as stakeholders monitored developments closely.
The Tokyo Stock Exchange saw its Nikkei 225 index fall by 0.9%, settling at 55,824.30 points. In South Korea, the Kospi dropped 1.6% to 5,776.03, while Hong Kong's Hang Seng Index experienced a 0.4% decline, reaching 25,801.87. Similarly, the Shanghai Composite Index fell by 0.7% to 3,965.70. Australian shares reflected general market discontent as the S&P/ASX 200 edged down by 0.1%, while Taiwan's Taiex also reported a slight decrease of 0.1%.
In futures markets, U.S. indices were down over 0.1% on Thursday, despite a previous rally in response to the temporary ceasefire announcement. Oil prices, however, exhibited volatility, rebounding from an earlier decline that briefly saw Brent crude dip below $92 per barrel. Brent crude, which is the international benchmark, increased by 2.4%, reaching $97.02 per barrel, while U.S. benchmark crude climbed by 3.3% to $97.50.
The market remained reactive to uncertainties surrounding global energy supply, particularly with the Strait of Hormuz closed. This route is critical, carrying about a fifth of the world's oil supply, and U.S. officials have insisted it must be reopened.
Meanwhile, discussions aimed at establishing a permanent cessation of hostilities could commence as early as Friday in Pakistan, with U.S. Vice President JD Vance expected to lead the American negotiating team.
On Wall Street, the mood turned positive on Wednesday when U.S. President Donald Trump announced the ceasefire with Iran. The S&P 500 index surged by 2.5% to close at 6,782.81, and the Dow Jones Industrial Average rose by 2.9% to 47,909.92. The Nasdaq composite also saw an uptick of 2.8%, finishing at 22,635.00. This optimism translated into noteworthy gains for airline stocks, with United Airlines shares climbing by 7.9%, American Airlines up by 5.6%, and Carnival cruise line shares surging by 11.2%, all aimed at recouping losses sustained during the conflict.
Conversely, the prices of gold and silver experienced declines, with gold dropping by 0.7% to $4,743.20 per ounce and silver falling by 1.6% to $74.18 per ounce. The U.S. dollar appreciated, rising to 158.66 Japanese yen from 158.57 yen, while the euro was trading at $1.1668, up from $1.1663.
In summary, the situation remains fluid as stakeholders monitor potential resolutions to the rising tensions in the Middle East, which continue to exert pressure on global markets and commodity prices.
