Oil Prices Surge Over 3% on US-Saudi Strikes Against Iran-Backed Militants
Oil prices surged more than 3% on Wednesday after US and Saudi warplanes carried out strikes against Iran-backed militants in Iraq. The attacks targeted 'Iran-aligned terrorists' who launched over two dozen drone attacks in recent days, according to the US military.
The strikes came after three days of calm following almost two weeks of nightly US strikes on Iran, as well as repeated missile and drone salvos targeting Washington's allies around the Gulf. Iran had halted three oil tankers in the Strait of Hormuz, through which a fifth of global crude and gas pass.
Both main oil contracts rose more than 4% Wednesday, with Brent prices swinging wildly this month from $72 at the start of July to over $100 last week before the pause. The latest developments highlight the fragility of any efforts to find a lasting peace, despite US President Donald Trump's comments that there was a 'good chance' of a deal.
In equity markets, tech sector stocks came under pressure as traders fretted over the immense sums being pumped into AI research, with investors questioning whether firms' lofty expectations will be met. The Information reported that China's Shanghai Yuliangsheng had started mass production of a chipmaking technology long dominated by Dutch firm ASML.
Seoul was on the frontline, with the Kospi plunging more than 6% to extend Tuesday's near-11% collapse as chipmakers SK hynix and Samsung were hammered 10% and 6%, respectively. SK hynix's selloff came after its April-June operating profit and revenue came in below expectations.
Josh Gilbert, of eToro, said 'When you're the dominant supplier of high-bandwidth memory that powers Nvidia's chips, the AI boom lands directly on your bottom line.'