Crude futures went on to give up some of the gains but still rose around three percent.
“The military actions have been renewed at an extraordinary high,” said John Kilduff of Again Capital. “And the rhetoric is as hot as it’s been since the beginning of the war.”
US President Donald Trump threatened to knock out one Iranian bridge or power plant in return for each attack on shipping in the Strait of Hormuz.
Foreign Minister Abbas Araghchi said Iran would respond in kind to any attack on its infrastructure, saying on X, “our defence doctrine is clear: eye for an eye.”
Meanwhile, maritime data showed that at least nine ships had turned back from crossing the Bab al-Mandab strait at the southern end of the Red Sea after Houthi rebels announced a blockade of Saudi ports.
According to maritime data firm Kpler, three of the ships had taken on oil at Saudi Arabia’s Red Sea Yanbu terminal, which is an important means for Riyadh to bypass the Hormuz Strait.
Still, US equity markets had a muted response to the latest surge in oil prices, with the broad-based S&P 500 losing just 0.1 percent.
CFRA Research senior vice president Arun Sundaram cited a litany of worry items in a “growing list of headwinds” including renewed Trump tariff threats, spiking US bond yields and fears over China’s artificial intelligence competitiveness.
“The market has refused to flinch, like a boxer absorbing punch after punch while refusing to go down,” Sundaram said.
While stock market traders kept a close watch on the Mideast war developments, focus was also firmly on the technology sector, as it has been for several weeks.
“A rotation away from tech has resulted in a better day for European markets overall, which continue to defy the strength in oil,” said Chris Beauchamp, chief market analyst at online trading and investing platform IG.
Tech stocks had rebounded on Wall Street on Tuesday, but had a more difficult day on Wednesday, with the tech-heavy Nasdaq finishing down 0.6 percent.
Companies that are massively deploying AI, such as Amazon, Meta and Microsoft, were trading sharply lower.
The recent “pull-back in chip stocks following a storming run earlier this year has left investors hungry for an update on AI-related demand and to see if all the big investments into tech infrastructure are paying off,” said Russ Mould, investment director at AJ Bell.
The S&P 500 fell 0.1 percent, to 7,498, the Nasdaq fell 0.6 percent, to 25,690, while the Dow slipped 0.01 percent, to 52,218. (AFP)
