Oil prices climbed more than $5 on Thursday after President Trump vowed to hit Iran “extremely hard” in the coming weeks, dashing hopes of an imminent de-escalation as the conflict entered its fifth week.
Asian stocks also took a hit after Trump’s speech, as most Southeast Asian countries rely heavily on oil imports, leaving them especially exposed.
US President Donald Trump delivered a primetime televised speech about the ongoing conflict happening in Iran on Wednesday.
As reported, the situation remains volatile, resulting in instability as the prices of oil rose, and Asian shares fell following the recent speech as he clarified that his core objectives are nearing completion.
Given the gravity of the situation, he called on countries reliant on the Middle East to take responsibility for keeping the Strait of Hormuz open, noting that the US no longer requires energy from the region.
The strait is a crucial shipping lane in the Persian Gulf that is significant for moving about 20 percent of the world’s oil.
Brent crude futures LCOc1 rose $6.33 or 6.3 percent to $107.49 per barrel early on Thursday, while US West Texas Intermediate crude CLc1 futures were up $5.28, or 5.3 percent to $105.40 per barrel.
Meanwhile, the US national average for gasoline has crossed $4 a gallon, creating a significant political tension for the Republican Party ahead of the November midterms.
Most Southeast Asian countries rely heavily on oil imports, leaving them especially exposed to the sharp rise in oil prices triggered by the Middle East war.
Iran’s closure of the Strait of Hormuz in retaliation for the US-Israeli attacks has disrupted about one-fifth of global oil and liquefied natural gas (LNG) supplies, causing the world’s biggest energy crisis in decades.
Additionally, the gains also followed an earlier fall of more than $1 in both benchmarks prior to Trump’s televised speech to the nation.
The latest oil prices rose more after President Donald Trump said the United States would continue attacks on Iran without committing to a specific timeline to end the war, fanning investor fears about sustained disruptions to supply.
Asian stocks also took a hit as emerging market stocks fell overall, with a main regional index—the MSCI gauge of EM Asia equities—dropping 2.3 percent, while regional currencies weakened slightly by 0.2 percent.
