Brent crude tops $100 after US and Iran clash in Hormuz Strait

A direct military clash between the US and Iran in the Strait of Hormuz on Friday has reignited fears of a wider conflict, sending Brent crude prices surging 1 percent to over $101 a barrel and threatening a major disruption to global energy supplies.

"The stock market is 'seeing through' the war, while oil prices continue to hold a war premium," said Hebe Chen, a senior market analyst at Vantage Global Prime in Sydney. "This divergence tells you that the market has quietly concluded that the worst-case scenario is fading and has turned the page, even if the ink isn't dry yet."

The escalation, which reportedly involved an Iranian missile attack on three US warships after US strikes on coastal areas, sent European stocks lower, with the Stoxx 50 index falling 1.06 percent. In contrast, S&P 500 futures showed resilience with a 0.2 percent gain, while Asian stocks capped their fifth consecutive week of gains. The 10-year US Treasury yield held steady around 4.39 percent, reflecting inflationary concerns from higher oil prices.

The clash puts the global economy at a crossroads, testing whether the powerful AI investment narrative can outweigh a classic geopolitical oil shock. With 20 percent of the world's oil passing through the Strait of Hormuz, a prolonged closure could trigger sustained inflation, forcing central banks to reconsider their policy paths and potentially derailing the bull market.

AI Narrative vs. Geopolitical Risk

The divergence in market reaction highlights a key theme of 2026: the resilience of equity markets in the face of traditional macro risks. Investors, buoyed by the transformative potential of artificial intelligence, have largely shrugged off geopolitical tensions that would have historically sent markets reeling. The MSCI Asia Pacific Index posted its fifth straight weekly gain, its longest streak since January.

South Korea’s Kospi index, in particular, has been the best-performing major global index this year. Investors are betting that Korean companies, as core suppliers for AI infrastructure, will see sustained earnings growth. Goldman Sachs recently raised its target for the benchmark index for the second time in three weeks, citing durable profitability in memory semiconductors.

"There might be volatility and negative headlines like today, but unless there is a severe new escalation, the market will be broadly looking to buy the dip," said Jun Bei Liu, a co-founder at Ten Cap Investment Management.

Strait Shutdown by the Numbers

The economic stakes of the Hormuz closure are immense. Prior to the conflict, about 20 percent of the world's traded oil and a significant volume of liquefied natural gas passed through the 21-mile-wide chokepoint daily.

According to the U.S. military, 1,550 vessels from 87 countries are currently stranded in the Persian Gulf, with 22,500 mariners stuck on board. The number of ships transiting the strait has plummeted to just 534 since hostilities began, compared to a normal flow of over 6,500 in the same period, according to Lloyd’s List Intelligence. The disruption has caused the average price of gasoline in the U.S. to rise by 50 percent to $4.56 a gallon, according to AAA.

Diplomatic efforts to reopen the waterway remain deadlocked. The Trump administration has submitted a proposal to Tehran, reportedly offering sanctions relief in exchange for a moratorium on nuclear enrichment, but Iranian officials have called the plan "unrealistic." Meanwhile, Iran has established a new agency to levy tolls on ships, signaling an intent to control the strait long-term.

This article is for informational purposes only and does not constitute investment advice.