By Ronnie Harui


Oil prices rose and Asian equities fell in early trade Thursday as escalating U.S.-Iran tensions exacerbated fears of supply disruptions in the Middle East and spooked investors into taking funds out of stock markets.

The U.S. launched a fresh wave of attacks on Iran Wednesday, conducting strikes against multiple targets on President Trump's orders, the American military said. U.S. military forces were striking air defenses and radar sites near the Strait of Hormuz, a senior U.S. official said. The Strait of Hormuz is a critical waterway through which one-fifth of the world's oil is typically transported.

The American military described the attacks as "additional self-defense strikes" in response to Iran's "unwarranted and continued aggression" and marks the latest exchange of strikes between the two sides this week. On Tuesday, the U.S. military launched three waves of attacks against Iranian radar sites, air defense and ground control stations after an Iranian drone a day earlier downed a U.S. Apache helicopter in the Strait of Hormuz.

"At this stage, it is too early to say whether the current escalation marks a full resumption of hostilities or a dangerous but still containable episode," Rystad Energy's Jorge Leon said in an email. "The direction of travel is now more uncertain, and the next few days will be critical in determining whether diplomacy can reassert itself or whether the conflict moves into a more sustained escalation cycle," the senior vice president and head of geopolitical analysis added.

Front-month West Texas Intermediate crude oil futures rose 2.6% to $92.36 per barrel, while front-month Brent crude oil futures gained 2.2% to $95.17 a barrel, according to ICE data.

Equity markets across the Asia-Pacific region were lower. Japan's Nikkei Stock Average fell 1.7%, South Korea's Kospi dropped 2.8% and Australia's S&P/ASX 200 benchmark index shed 0.7%.

"Continued U.S.-Iran tensions and a sharp semiconductor sell-off [in the U.S.] dampened investor sentiment," said Skye Masters, head of Markets Research at National Australia Bank, in commentary.


Write to Ronnie Harui at ronnie.harui@wsj.com


(END) Dow Jones Newswires

06-10-26 2116ET