Oil prices remained close to their highest levels since May on Friday as renewed tensions in the Middle East kept investors focused on the risk of further disruption to global energy supplies.
Brent crude remained above $105 a barrel, trading around $105.56 early on Friday compared with $105.51 at Thursday’s London close.
Geopolitical tensions intensified after Iran’s Revolutionary Guards said its navy had targeted a US unmanned surface vessel in the Strait of Hormuz, one of the world’s most important oil shipping routes.
The Revolutionary Guards said the Saildrone Explorer-type vessel was operated by the US Fifth Fleet, which is based in Bahrain.
The latest incident adds to concerns over the security of shipping through the Strait of Hormuz, with energy markets continuing to assess the possibility of further disruption to global oil flows.
The uncertainty weighed heavily on Asian equities, which followed Wall Street lower.
Japan’s Nikkei 225 fell 2.8% to 63,442.30, while South Korea’s Kospi dropped 2.3% to 6,872.39.
Hong Kong’s Hang Seng declined 0.8% to 24,753.54, while the Shanghai Composite fell 1.8% to 3,862.73.
Australia’s S&P/ASX 200 lost 1.2%, Taiwan’s Taiex dropped 1.7% and India’s Sensex declined around 1%.
The losses followed another weak session on Wall Street, where the S&P 500 fell 0.6% for its fourth consecutive decline. The Dow Jones Industrial Average also lost 0.6%, while the technology-heavy Nasdaq Composite fell 0.7%.
Safe-haven demand remained evident in commodity markets, with gold trading around $4,406 an ounce, up from $4,363.96 on Thursday.
Copper stood near $6.48 per pound, while Bitcoin traded around $77,100.
With oil holding above $105 and tensions around the Strait of Hormuz showing little sign of easing, investors remain concerned that prolonged disruption to energy supplies could add further pressure to inflation, bond yields and global equity markets.
