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Asian Markets · Geopolitics · Oil · Strait Of Hormuz
Oil rebounded by 3.1% for Brent crude to $97.61 a barrel and 3.6% for WTI crude to $97.85 a barrel, while Asian equities, including Japan's Nikkei Stock Average (down 0.6%), South Korea's Kospi (down 1.4%), and Hong Kong's Hang Seng Index (down 0.8%), fell early Thursday as marine traffic through the Strait of Hormuz remained throttled amid a fragile U.S.-Iran cease-fire.
Iran informed mediators it would limit ships crossing the Strait of Hormuz to approximately a dozen daily and charge tolls under the two-week cease-fire brokered by President Trump. S&P Global Market Intelligence reported that only four ships passed through the strait on Wednesday, marking the fewest so far in April.
Oil-tanker traffic in the strait halted Wednesday evening after Israel conducted fresh airstrikes on Beirut and parts of southern Lebanon, according to Iran's semiofficial Fars News Agency. Iran reiterated that its cease-fire with the U.S. should include a pause in the fighting in Lebanon, but the U.S. stated Lebanon was not part of the agreement.
Commonwealth Bank of Australia analyst Vivek Dhar indicates more upside than downside risks to oil prices persist as long as the Strait of Hormuz remains closed. Analysts believe oil prices hinge on whether hostilities truly stop, if shipping volumes return to normal rates during the two-week period, and how quickly the energy supply chain recovers from conflict-related disruptions.
Asian currencies also consolidated against the dollar, with the greenback rising 0.2% to 158.87 yen and strengthening 0.25% to 1,428.00 won, due to the disagreement on the cease-fire's scope and the blocked key waterway.
