Oil prices rose above $107 a barrel on Wednesday after reports that Iran had attacked two vessels in the Strait of Hormuz, adding to concerns about global energy supplies as tensions in the Middle East continued to weigh on financial markets.
Brent crude, the international oil benchmark, gained around 1% in early European trading, briefly climbing above $107 a barrel. US West Texas Intermediate (WTI) crude also advanced, rising 0.5% to $94.64 a barrel. The gains reflected renewed concern about disruptions to oil shipments through one of the world’s most important energy transport routes.
According to Reuters, Iran reportedly used new tactics to target shipping in the Strait of Hormuz. The developments came as the escalating conflict involving the Houthis and Saudi Arabia created further uncertainty over crude oil supplies.
Saudi Arabia said on Wednesday that an attack on an Aramco building in the eastern part of the country had caused a limited fire. The kingdom also reported that debris from intercepted Houthi missiles had injured four people in Riyadh, its capital.
The growing security risks also pushed European natural gas prices close to their highest levels in four years. Dutch TTF gas futures, a key European benchmark, traded slightly above 86 euros per megawatt-hour on Wednesday morning, just below the previous peak of 87.44 euros.
Higher energy prices can increase costs for businesses and households, particularly if supply disruptions persist. For financial markets, the concern is that a prolonged rise in oil and gas prices could add to inflationary pressure and complicate decisions by central banks on interest rates.
European stock markets nevertheless opened higher on Wednesday. The Euro Stoxx 50 gained 0.3%, while the broader Stoxx Europe 600 rose 0.2%. France’s CAC 40 advanced 0.5%, and Spain’s IBEX 35 climbed 0.6%. The UK’s FTSE 100, Germany’s DAX, Italy’s FTSE MIB and the Netherlands’ AEX also traded in positive territory, with gains ranging from 0.1% to 0.6%.
Asian markets delivered a more mixed performance as investor interest in semiconductor companies and artificial intelligence continued to support some shares. Japan’s Nikkei 225 and Hong Kong’s Hang Seng Index each gained 0.5%, while China’s Shanghai Composite fell 0.3%. Australia’s S&P/ASX 200 declined 0.6%, and South Korea’s Kospi lost 1%.
In the United States, major stock indexes ended Tuesday’s session little changed, remaining close to record levels. The S&P 500 slipped by less than 0.1%, moving slightly further from its all-time high set the previous week. The Dow Jones Industrial Average fell 0.3%, while the Nasdaq Composite declined 0.2%.
The latest round of quarterly earnings reports from major US companies offered some support to investors, with initial results exceeding analysts’ expectations. However, gains in some shares were offset by losses elsewhere, leaving the broader market with little overall movement.
Goldman Sachs initially rose more than 4% after reporting third-quarter profit well above analysts’ forecasts, but the gains faded during the session. The bank’s shares finished 0.2% lower after moving between positive and negative territory.
Expectations for corporate earnings remain high. According to FactSet, analysts were forecasting year-on-year earnings growth of nearly 30% for S&P 500 companies in the third quarter. Companies will need to deliver results that justify elevated share prices as investors weigh persistent inflation concerns, pressure from the bond market and geopolitical risks in the Middle East.
Technology stocks have also faced questions over whether enthusiasm for artificial intelligence has pushed some semiconductor valuations too high. In Asian trading on Wednesday, Chinese memory chipmaker CXMT rose about 1%, while Samsung Electronics shares advanced in South Korea. SK Hynix, another major memory chip producer, moved lower.
In the US bond market, Treasury yields eased on Tuesday following a decline in oil prices. The yield on the 10-year Treasury note fell to 5.21% from 5.24% late Friday. The market had been closed on Monday for a public holiday.
Currency markets were also in focus as investors monitored economic and geopolitical developments. The US dollar traded at 158.30 yen, while the euro stood at $1.1209.
The latest rise in crude prices highlights how quickly renewed security concerns in the Middle East can affect energy markets, even as investors continue to assess corporate earnings, technology valuations and the outlook for inflation. The scale and duration of any disruption to shipping and energy supplies will remain important factors for oil prices and the wider financial markets.
