Oil rises, stocks fall as worries over attacks in Strait of Hormuz flare
Oil prices rose on Wednesday, and stocks fell amid fresh concerns about Middle East supplies following a warning that Iran appeared to be stepping up attacks in the Strait of Hormuz.
The retreat came as investors brushed off another record day on Wall Street, where the Nasdaq and S&P 500 were boosted by a rush back into the AI trade that saw chip titan Nvidia push towards a $6 trillion market capitalisation. Confidence has been given a boost this week as reports said that exports from the Middle East — excluding Iran — were pushing back towards pre-war levels.
That helped push global benchmark Brent below $100 a barrel and West Texas Intermediate below $90, easing inflation concerns and giving central banks some room to hold off hiking interest rates. However, both contracts rebounded on Tuesday as figures showed Tehran had increased strikes on tankers in the crucial Strait of Hormuz. UK Maritime Trade Operations said there had been nine attacks so far this month, representing half of the September total in the waterway and the Gulf combined.
Yemen’s Houthis also claimed an attack on Riyadh’s main airport and denied reports they had been pushed back by government forces, who have launched a major operation to recapture lost territory. The Houthi statements came as Yemen’s military said it had removed the pro-Iran group from areas around the Bab al-Mandeb strait — a Red Sea chokepoint — and the port city of Mocha.
The developments come as top oil officials warn that global stockpiles are running low, meaning governments’ ability to withstand the impact of the crisis is waning. “Reports of increased flows across the region have offered some downside pressure on crude, but this has been offset by varying reports around the scale of attacks on vessels moving through the Strait,” said Chris Weston at Pepperstone.
“For now, the market remains highly sensitive to headlines and geopolitical risk.”
