Oil prices climbed, and stocks across Asia fell on Friday after the United States said it had struck Iranian military sites in retaliation for Iran firing on U.S. warships in the Strait of Hormuz.
Despite the exchange, President Donald Trump insisted the ceasefire remained intact. But he also issued a stark warning to Iran, urging it to accept the American peace agreement quickly and suggesting that if the truce collapsed, the consequences would be dire. Iran, he said, would become “one big glow.”
Oil prices jump.
The price of Brent crude, the global benchmark for oil, rose 2% to about $102 a barrel.
West Texas Intermediate crude, the U.S. benchmark, increased 2% to $96 a barrel.
Investors and analysts are focused on the continued disruption to shipping in the Strait of Hormuz, the narrow waterway between Iran and Oman that is a vital trading route for oil and natural gas, which normally carries as much as one-fifth of the world’s oil supply.
Stocks in Asia slip.
Futures on the S&P 500 pointed to a modest increase when stocks resume trading in the United States on Friday.
Stocks in Asia, where countries import vast quantities of oil and gas, were broadly lower. Hong Kong’s Hang Seng Index fell 1%, while markets in Japan, South Korea, and mainland China were all lower.
This article originally appeared in The New York Times.
Markets across the world have enjoyed a strong run this week on growing optimism that the 10-week conflict -- which has sent oil prices soaring -- will be concluded soon.
However, the risk-on mood was tempered on Thursday following news that US forces had carried out strikes on Iranian military targets in response to an attack on three American destroyers in the Strait, threatening a month-old ceasefire. For its part, Iran's central military command accused the United States of violating the ceasefire by attacking an oil tanker and another ship.
Following the clashes, Donald Trump wrote on his Truth Social platform: "We'll knock them out a lot harder, and a lot more violently, in the future, if they don't get their Deal signed, FAST!" But when asked in Washington if the truce was still on, the US president said: "Yeah, it is. They trifled with us today. We blew them away."
The clash came a day after Trump said an agreement could be near and as Tehran considered a one-page US proposal to end the conflict and reopen the Strait, through which a fifth of world oil and gas usually passes.
Also, the Wall Street Journal said the White House was considering restarting an operation to help commercial ships through the Strait, which Trump dropped after just a day earlier this week.
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