Oil jumps while Asian markets are on edge Tuesday as investors keep a close watch on escalating U.S.-Iran tensions over the Strait of Hormuz.
The U.S. launched its third consecutive night of strikes on Iran following President Trump's announcements of a multiday wave of attacks and a fresh blockade on Iranian trade in the strait.
"We are reinstating the THE IRANIAN BLOCKADE, so named because it is only stopping Iran's ships or customers from entering or leaving," Trump said in a Truth Social post.
He added that the U.S. would charge 20% of every cargo shipped as compensation for guaranteeing safe passage through the Strait of Hormuz.
"The U.S. naval blockade means Iran is highly incentivised to enforce its own blockade again and suggests that attacks will continue to stop ships trying to pass through the strait without Iran's permission," said Vivek Dhar, analyst at Commonwealth Bank of Australia.
Front-month West Texas Intermediate crude futures rose 1.4% to $79.25 a barrel on Tuesday, while front-month Brent crude futures climbed 0.85% to $84.01 a barrel.
Asian markets were mostly lower. Japan's Nikkei Stock Average was down 1.0% and Taiwan's Taiex fell 2.75% while Hong Kong's Hang Seng Index inched 0.2% lower.
Selling in the South Korean stock market continued, with the benchmark Kospi index dragged 1.6% lower by losses in chip-making heavyweight SK Hynix. Its shares were recently down 4.6% while fellow chip-making giant Samsung Electronics rose 1.2% after Monday's heavy losses.
Asian currencies were mixed but remain sensitive towards Middle East tensions.
"Renewed concerns about energy supply disruption in the Strait of Hormuz" has weighed on risk sentiment, CBA's Carol Kong said in a research report.
"The flare-up of military confrontation between the U.S. and Iran risks pulling AUD/USD [Australian dollar/U.S. dollar] down to support at 0.6847," CBA's Kong, economist and currency strategist said.
Oil sensitive regional currencies, including the Indian rupee, Indonesian rupiah and Thai baht, and could come under pressure in response to the sharp rise in energy prices, said Chang Wei Liang, FX and credit strategist at DBS Group Research.
The Australian dollar was little changed at US$0.6918, while the U.S. dollar was 0.1% lower at 18,080 rupiah, and last traded steady at 33.50 baht, LSEG data showed.
"Should capital markets sentiment soften, the dollar's elevated valuation could leave it vulnerable to a more pronounced correction," said Chang.
Write to Kimberley Kao at kimberley.kao@wsj.com
(END) Dow Jones Newswires
July 13, 2026 23:10 ET (03:10 GMT)
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