Oil Prices Rise as Iran-Hormuz Tensions Return, Global Stocks Slip on Inflation Fears

Global oil prices climbed on Friday as fresh concerns over the security of the Strait of Hormuz revived fears of supply disruptions, while stock markets mostly weakened amid renewed inflation worries and uncertainty over interest rate decisions.

Crude markets had started the week on a positive note after US President Donald Trump suspended plans for strikes on Iran and suggested a possible agreement was near, although Tehran denied that negotiations had taken place.

Hopes for a quick resolution weakened after Iran indicated that any agreement with Oman over managing the strategic waterway would require the United States to end its naval blockade of Iranian ports. The development raised concerns that the Strait of Hormuz, a key route for global energy shipments, could remain restricted.

Oil prices gained momentum after Iran’s Fars news agency reported that Tehran would seek to prevent US and Israeli vessels from using the strait under any potential arrangement with Oman. The report pushed crude prices higher, with both major contracts extending gains on Friday.

The Strait of Hormuz is one of the world’s most important energy routes, with about one-fifth of global oil and liquefied natural gas supplies passing through it. Any prolonged disruption could increase energy costs, fuel inflation and complicate central banks’ efforts to manage interest rates.

Equity markets reacted cautiously, with several Asian markets closing lower. Seoul remained under pressure due to concerns surrounding the artificial intelligence sector, while Tokyo, Sydney, Wellington, Taipei, Bangkok and Mumbai also recorded declines. Hong Kong, Shanghai, Singapore and Jakarta posted modest gains, while European markets opened slightly higher.

The latest market moves followed a pullback on Wall Street, where the Dow Jones Industrial Average fell after reaching record highs for three consecutive sessions. Investors are now watching upcoming US employment data and inflation figures for clues about the Federal Reserve’s next interest rate decisions.

Analysts said markets need economic data that shows inflation is cooling without signalling a major slowdown. Clark Bellin of Bellwether Wealth said investors need a jobs report that is “not too hot and not too cold” for markets to maintain their upward momentum.

Michael Hewson of Market Insights warned that persistent price volatility could keep inflation elevated, potentially influencing future rate decisions. He noted that recent concerns among some Federal Reserve officials about inflation pressures remain a key factor shaping market expectations.