Oil prices surge again after 5% jump as Strait of Hormuz closure fears grip markets

Global oil prices climbed for a second straight day on Tuesday, extending Monday’s 5% surge as geopolitical tensions over the Strait of Hormuz kept markets on edge. Brent crude oil, the international benchmark, rose 2.4% to $89.80 per barrel, while U.S. benchmark crude increased 2.6% to $84.28 per barrel. The gains followed Monday’s 5% jump in Brent crude, which had swung between $72 and $102 throughout July as hopes for a U.S.-Iran deal to reopen the critical shipping route ebbed and flowed. The uncertainty stems from Iran’s demand that the U.S. pay for damages caused by five months of war as a condition for reopening the strait, a demand President Donald Trump dismissed. The closure of the Strait of Hormuz, a chokepoint for roughly one-fifth of the world’s oil supply, has kept global crude flows in limbo. Asian markets showed mixed performance on Tuesday, with South Korea’s Kospi leading gains at 0.7% after Samsung Electronics surged 4.1%. However, Hong Kong’s Hang Seng fell 1.1%, and the Shanghai Composite dropped 0.8%. European indices also slipped, with France’s CAC 40 down 0.2% to 8,708.85 and Germany’s DAX falling 0.2% to 26,272.81. U.S. stock futures were slightly lower, reflecting a pullback from record highs set earlier this month. The S&P 500 and Dow Jones Industrial Average futures were down 0.1%, while the Nasdaq composite fell 0.3%. Analysts noted that the recent rally in U.S. stocks, driven by strong corporate earnings, has lost steam, with earnings per share for S&P 500 companies expected to have jumped 50% in the second quarter compared to a year ago—the best growth since 2021. Meanwhile, gold prices, a traditional safe-haven asset, rose 0.3% to $4,434.20 per ounce, reflecting investor unease. The U.S. dollar strengthened slightly to 159.35 yen, despite recent interventions by Japan and the U.S. to prop up the yen. The euro weakened marginally to $1.1539. All eyes are now on Wednesday’s U.S. inflation data for July, with economists forecasting a slowdown to 3.4% from 3.5% in June, which could ease pressure on the Federal Reserve to raise interest rates. Higher rates would curb inflation but risk slowing economic activity by increasing borrowing costs for households and businesses.