Middle East Tensions Fuel Oil Price Spike Amid Tech Sector Woes
Oil prices surged on Wednesday after clashes in the Middle East reignited concerns over supply disruptions through the Strait of Hormuz. The US and Saudi warplanes launched strikes against Iran-backed militants in Iraq, which had carried out drone attacks in recent days. This move came after a brief pause in hostilities following almost two weeks of nightly US strikes on Iran and repeated missile and drone salvos targeting Washington's allies around the Gulf.
The Strait of Hormuz is a critical waterway through which nearly a fifth of global crude and gas are transported. Iran halted three oil tankers in the strait, further exacerbating supply worries. As a result, both main oil contracts rose more than four percent on Wednesday, with Brent climbing from around $72 at the start of July to over $100 last week before the three-day pause.
In contrast, the tech sector continued to suffer as investors grew wary of the AI boom's sustainability. Chip firms like SK Hynix and Samsung took a hit after reporting disappointing earnings. The latter saw its shares plummet more than 50 percent since hitting a record high just last month.