Oil prices surged on Friday as stock markets struggled amid uneasiness among investors, who have been growing more cautious by the minute due to the lack of any concrete progress in resolving the conflict that has gripped West Asia.
Amid declining investor confidence, crude prices climbed back sharply over the past week — up roughly 20% — undoing the brief respite that came at the start of the ceasefire, and reversing all prior losses that had been driven by hopes of a breakthrough in talks between Washington and Tehran.
Both Brent and WTI added more than 1% on Friday, building on gains from the previous session, as the Strait of Hormuz remained effectively closed and the US blockade of Iranian ports stayed in place.
The mood in markets has shifted noticeably, as cautious optimism over possible US-Iran negotiations turned into mounting uncertainty, as Tehran has refused to rejoin talks while the blockade continues, all the while Washington continues to ramp up its naval blockade.
President Donald Trump said that there was no urgency in Washington to reach a deal, alleging that it was rather Iran, which was now running out of time.
“I have all the time in the world, but Iran doesn’t — the clock is ticking,” he said, adding that the blockade was “airtight” and warning that conditions could worsen further for Tehran.
He also said the US would act against any vessels laying mines in the strait, though he ruled out the use of nuclear weapons.
The standoff has led to the adoption of any increasingly cautious mood across global markets, as equities across much of Asia — including Hong Kong, Shanghai, Sydney, Seoul and Singapore — slipped, while Tokyo and Taipei made modest gains.
Investors are also looking ahead to a heavy week of corporate earnings from major US tech firms including Alphabet, Meta, Microsoft, Amazon and Apple, adding another layer of caution.
As per analysts, confidence has only lowered as it has become evident that a quick resolution to the hostilities is unlikely. According to comments from Iranian officials, the Strait of Hormuz cannot fully reopen under current conditions, announcing that their concerns about a prolonged regional disruptions hnly further been reinforced concerns about prolonged disruption to energy flows.
On the military front, the arrival of the USS George H.W. Bush carrier group in the Middle East has brought the number of US carriers in the region to three, underlining the scale of the build-up.
There was, however, a small sign of tensions easing up, as Trump said a ceasefire between Israel and Lebanon would be extended by three weeks, expressing confidence that a broader agreement could follow. The conflict involving Hezbollah has been one of the key obstacles complicating wider negotiations with Iran.
