Brent crude tops US$ 125 a barrel on Iran war worries, while world stocks retreat

Global oil prices surged as Brent crude crossed $125 amid stalled US-Iran talks and closure of the Strait of Hormuz. Escalating tensions in the Iran war triggered market uncertainty, impacting Asian stocks and raising energy concerns worldwide

Hong Kong: The price of Brent crude oil surged past US$ 125 a barrel early Thursday as stalled US-Iran talks raised doubts over the reopening of the Strait of Hormuz and a permanent end to the Iran war.

Brent crude to be delivered in June jumped 6.2 per cent to US$ 125.36 and Brent to be delivered in July rose 3.1 per cent to USD 113.85.

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Benchmark US crude climbed 2.3 per cent to US$ 109.38 per barrel.

Before the start of the war in late February, Brent crude was trading around US$ 70 per barrel.

The Iran war, which is in its ninth week, still sees no clear path to an end. The US has continued its blockade of Iranian ports while the Strait of Hormuz, is closed, pushing oil prices higher. Reports Thursday suggesting an possible escalation by US President Donald Trump doused hopes for a quick end to the conflict.

“The breakdown of talks between the US and Iran, along with President Trump reportedly rejecting Iran’s proposal for a reopening of the Strait of Hormuz, has the market losing hope for any quick resumption in oil flows,” ING Bank strategists Warren Patterson and Ewa Manthey wrote in a research note.

US futures and share prices in Asia retreated following a muted performance on Wall Street on Wednesday.

Tokyo’s Nikkei 225 shed 1.6 per cent to 58,967.07 and the Kospi in South Korea fell 1.1 per cent to 6,615.51.

Hong Kong’s Hang Seng lost 1.3 per cent to 25,772.50, and the Shanghai Composite index traded 0.1 per cent higher at 4,109.99. China’s factory activity for April slowed slightly but remained in expansion territory for the second month, despite the global energy shock prompted by the Iran war, an official survey showed.

Australia’s S&P/ASX 200 was down 0.3 per cent to 8,665.50.

Taiwan’s Taiex edged 0.1 per cent lower and while India’s Sensex lost 1.2 per cent.