Oil Surges and Global Stocks Slide Amid Hormuz Disruption and Limited
U.S.-China Progress
Hopes for an end to the war in Iran
faded after President Trump failed to secure a commitment from China to help
persuade Iran to reopen the Strait of Hormuz.
·
Markets were particularly concerned over the
continued disruption in the Strait of Hormuz, the critical oil shipping route
through which nearly one-fifth of global crude oil supplies normally pass.
·
Investors had hoped China might help persuade Iran
to reopen the waterway, but no clear breakthrough emerged from the Beijing
summit.
Oil Prices Extend Sharp Rally
·
Brent Crude rose more than 2% on Friday to nearly
$108 per barrel.
·
Oil prices have surged around 50% since the Middle
East conflict escalated earlier this year.
·
West Texas Intermediate climbed almost 3% to around
$103 per barrel.
Global Equity Markets Decline
·
Futures linked to the S&P 500 indicated a
decline of 0.8% after a recent technology-driven rally pushed U.S. markets to
record highs.
·
Asian markets recorded broad losses:
o
KOSPI fell more than 6%,
o
Nikkei 225 declined nearly 2%,
o
Hang Seng Index also dropped close to 2%.
·
European markets followed the downward trend:
o
STOXX Europe 600 slipped more than 1%,
o
Germany’s DAX and Britain’s FTSE 100 also weakened
by over 1%.
Fuel Prices Stay Elevated
·
According to AAA:
o
Average U.S. gasoline prices remained at $4.53 per
gallon,
o
Driving costs have increased about 52% since the
conflict began.
·
Diesel prices eased slightly by one cent to $5.66
per gallon but remain roughly 50% higher than pre-war levels.
·
Analysts noted that retail fuel prices generally
respond with a delay to changes in crude oil markets.
Analysts Warn of “Protracted Energy Shock”
·
Analysts at Deutsche Bank warned that market
sentiment has deteriorated after Mr. Trump suggested the United States could
manage without reopening the Strait of Hormuz immediately.
·
According to the bank, prolonged closure of the
waterway could trigger a sustained global energy shock, increasing inflationary
pressure and slowing economic growth worldwide.
[ABS News Service/15.05.2026]
Oil
prices jumped on Friday and stocks tumbled as the markets contended with persistent
supply disruptions in the Middle East and the absence of meaningful breakthroughs
at the summit in Beijing between President Trump and China’s leader, Xi Jinping.
The
leaders of the world’s two biggest economies emphasized stability on Friday as their
high-stakes talks ended, but there was little indication that Mr. Trump had secured
a promise from China to help persuade Iran to reopen the Strait of Hormuz.
The
strait, the narrow waterway through which a fifth of the world’s crude oil is transited,
has remained effectively closed since the United States and Israeli went to war
with Iran in late February. Investors are worried that the passageway will be choked
beyond June.
Oil prices climb again.
·
The
price of Brent crude, the international benchmark, jumped more than 2 percent
on Friday, to just under $108 a barrel. Oil prices have climbed 50 percent
since war broke out in the Middle East.
·
A
barrel of West Texas Intermediate, the U.S. benchmark, rose nearly 3 percent to
$103.
Stocks tumble as tech
rally fades.
·
Futures
trading in the S&P 500 pointed to a decline of 0.8 percent when markets
open on Friday after a strong rally in tech shares in recent weeks sent the
index to record highs.
·
Asian
stocks fell broadly, led by a sell off in South
Korea, where the benchmark Kospi index tumbled more than 6 percent. The Nikkei
225 in Japan and the Hang Seng in Hong Kong both fell nearly 2 percent.
·
The
selling spread to markets in Europe. The Stoxx 600, a broad European index,
declined more than 1 percent, as did the DAX in Germany and the FTSE 100 in
Britain.
Gas prices remain
elevated.
·
The
average price of a gallon of regular gas held steady at $4.53 on Friday,
according to the AAA motor club. Higher gas prices have pushed up driving costs
52 percent since the war began.
·
Gas
prices typically lag behind changes in oil prices by a few days.
·
The
average price of a gallon of diesel fuel fell a penny to $5.66, 50 percent
higher than when the war started.
What they are saying:
Expect a “protracted energy shock.”
·
Markets
have lost momentum because President Trump has said the United States does not
need the Strait of Hormuz to be reopened, analysts at Deutsche Bank wrote in a
research note.
·
Mr.
Trump’s comments have added to investors’ fears that the waterway will remain
blocked for some time, which would lead to a “more protracted energy shock”
that will weigh on the global economy, they added.