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The price of Brent crude, the international benchmark, gained 3.9% to $78.96 per barrel, while the US benchmark crude oil price rose 4% to $74.26 per barrel.
Prices for both types of crude oil had recently slipped back to the levels seen before the war with Iran began, after the two sides reached an interim agreement to end the conflict and ships resumed transporting oil through the Strait of Hormuz.
However, the United States launched several waves of strikes on Iran early on Monday morning following an Iranian attack on a container ship in the Strait of Hormuz that set the vessel ablaze and left one crew member missing over the weekend. Iran retaliated by targeting countries across the Middle East.
US stock futures fell, with the contract for the S&P 500 down 0.4% and that for the Dow Jones Industrial Average 0.3% lower. Nasdaq Composite futures lost 1%.
In Asian trading, Tokyo’s Nikkei 225 index lost 1.1% to 67,786.86, while in Seoul, the Kospi declined 5.6% to 7,060.69.
Shares in South Korean memory chipmaker SK Hynix, which soared 13% on their Wall Street debut on Friday, slumped 10.6% in Seoul. Its bigger rival, Samsung Electronics, fell 6.7%.
Elsewhere in Asia, Hong Kong’s Hang Seng edged 0.1% higher to 24,202.41, and the Shanghai Composite index shed 1.2% to 3,947.34.
In Australia, the S&P/ASX 200 declined 0.3% to 8,777.00.
US stocks ticked higher on Friday after investors showed sustained appetite for winners of the artificial intelligence (AI) boom. The S&P 500 rose 0.4% and the Dow Jones Industrial Average added 0.3%. The Nasdaq Composite climbed 0.3%.
SK Hynix’s shares jumped after trading began at midday after it raised roughly $26.5 billion by selling American depositary shares at a price of $149 each.
SK Hynix’s stock in Seoul had already surged more than 600% over the past year thanks to enthusiasm for AI. The boom has translated into real profits, driven by soaring demand for computer memory. But it has also raised concerns that AI stock prices have climbed too high and that the world’s spending on chips and data centres will not generate enough productivity and profit growth to justify the investment.
That has led to sharp swings in AI stocks, which have become some of Wall Street’s most influential because of their enormous market values.
Nvidia was the single biggest force lifting the S&P 500 on Friday, rising 4%.
Beyond the uncertainty surrounding AI, investors are turning their attention to the upcoming corporate earnings season.
Companies across industries will need to deliver strong profit growth to justify their elevated share prices, which remain close to record highs. This week will bring earnings reports from many of the biggest US banks, including Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs and Wells Fargo, with several reporting on Tuesday alone.
Concerns about how the continued fighting with Iran will affect the global flow of crude oil are clouding the outlook for both energy costs and overall inflation.
High bond yields have been weighing on financial markets worldwide because more expensive oil and persistently high inflation could prompt the Federal Reserve and other central banks to raise interest rates.
Higher interest rates can help keep inflation under control, but they also slow economic growth and weigh on the prices of all kinds of investments.
Additional sources • AP