By Ronnie Harui
Asian equity markets declined and crude-oil futures rose Monday morning, as escalating Iran-Israel tensions fueled concerns over Middle Eastern supply disruptions.
Iran fired at least four waves of missiles toward Israel on Sunday in response to an Israeli airstrike on Beirut hours earlier targeting the Tehran-backed militants Hezbollah.
The attack marked the first time that Iran has targeted Israel since its ceasefire with the U.S. went into effect in early April, raising the prospect of a sustained closure of the Strait of Hormuz, the critical chokepoint through which approximately one-fifth of global oil supply flows.
While the Organization of the Petroleum Exporting Countries and its allies agreed to again increase oil production following a virtual meeting Sunday, the move was largely viewed as symbolic given that the Middle East conflict has effectively halted passage through the Strait of Hormuz. The OPEC+ group agreed to raise output by about 188,000 barrels a day in July, a fourth straight monthly increase.
"With the Strait of Hormuz closed, the issue is not whether OPEC+ raises paper quotas, but whether additional barrels can actually reach the market," Rystad Energy's Jorge Leon said in commentary. "In the current market, the physical impact of [OPEC+'s decision] would be close to zero," the head of geopolitical analysis added.
Front-month West Texas Intermediate crude oil futures advanced 2.3% to $92.59 per barrel and front-month Brent crude oil futures rose 2.4% to $95.32 a barrel, ICE data showed.
Meanwhile, equity markets across Asia slipped. Asian stocks were tracking Wall Street's rout Friday following a stronger-than-expected U.S. jobs report that boosted bets that the Federal Reserve will raise interest rates by the year-end.
The "stronger-than-expected jobs report triggered a sharp repricing of Fed expectations and accelerated the sell-off in AI-related stocks," Commerzbank Research analysts said in a research report. "The key story wasn't just the payrolls beat, but the combination of resilient U.S. growth, rising Fed hike expectations, and a sharp unwind in semiconductor shares," the analysts added.
South Korea's Kospi led the equity-market losses in the region. Chip stocks such as bellwether Samsung Electronics dropped 9.3% and SK Hynix fell 8.0%. The Korea Exchange suspended trade for 20 minutes for Kospi and five minutes for Kosdaq following a more than 8% drop for futures. The Kospi was last down 5.6%, while Japan's Nikkei Stock Average was 2.9% lower.
Write to Ronnie Harui at ronnie.harui@wsj.com
(END) Dow Jones Newswires
June 07, 2026 21:03 ET (01:03 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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