Crude Extends Gains, Most Stocks Drop as Mideast Hopes Dim

Oil prices extended gains on Tuesday while most Asian stocks fell as hopes for a US-Iran agreement to reopen the Strait of Hormuz remained distant following the expiration of a temporary truce.

Brent crude rose above 90 dollars per barrel as investors remained concerned about potential disruptions to global energy supplies through the strategically important waterway.

The development came after the deadline for extending the truce between the United States and Iran expired without a lasting agreement, increasing uncertainty over the direction of the conflict.

Higher oil prices have renewed concerns about inflation and the potential impact of prolonged energy supply disruptions on the global economy.

In Asian markets, Japan’s Nikkei 225 fell 2.5 per cent, while South Korea’s Kospi declined 1.6 per cent. Hong Kong and Shanghai markets also recorded more modest movements.

Indian equities continued their losing streak, with the Nifty 50 falling 0.55 per cent and the BSE Sensex declining 0.63 per cent on Tuesday.

The pressure on equities reflected growing investor concerns that sustained geopolitical tensions could keep energy prices elevated and complicate efforts to contain inflation.

US stock futures also pointed to a weaker opening, with S&P 500 futures down about 0.6 per cent and Nasdaq 100 futures falling 1.3 per cent.

The rise in oil prices has also pushed government bond yields higher as investors reassess the outlook for inflation and interest rates.

Brent crude was around 90.94 dollars per barrel on Tuesday, while US West Texas Intermediate crude traded near 84.99 dollars.

Market participants are closely watching developments around the Strait of Hormuz, through which a significant share of the world’s oil supplies passes.

Analysts said any prolonged disruption to shipping through the waterway could further increase crude prices and intensify inflationary pressures globally.

The uncertainty has therefore left investors cautious, with markets likely to remain sensitive to developments in US-Iran negotiations and the broader security situation in the Middle East.