By Ronnie Harui
Oil prices rose in Asia Monday afternoon as escalating Iran-Israel tensions fueled concerns over Middle Eastern supply disruptions, while Asian equity markets fell amid expectations of Federal Reserve interest-rate hikes that undermined appetite for risky assets.
Israel said Sunday that it had launched airstrikes on Iran in retaliation for waves of missiles fired at its northern regions. Iran had earlier launched at least 10 missiles in four waves of attacks Sunday in response to an Israeli airstrike on Beirut hours earlier targeting the Tehran-backed militant group Hezbollah.
Israel followed through on its pledge to retaliate against Iran's missile assault, despite warnings from U.S. President Trump to hold off, saying a deal to end the war was near.
The exchange marks the first time Iran and Israel have targeted each other since a U.S.-brokered ceasefire took effect in early April, raising the prospect of a prolonged closure of the Strait of Hormuz, a critical chokepoint through which roughly one-fifth of global oil supplies flow.
Although the Organization of the Petroleum Exporting Countries and its allies agreed Sunday to increase oil production again, the move was largely viewed as symbolic because the Middle East conflict has effectively halted transit through the Strait of Hormuz. OPEC+ agreed to raise output by about 188,000 barrels a day in July, marking a fourth consecutive 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,"added the head of geopolitical analysis.
Front-month West Texas Intermediate crude oil futures rose 4.1% to $94.29 a barrel, while front-month Brent crude oil futures gained 4.3% to $97.06 a barrel, according to ICE data.
Meanwhile, equity markets across Asia slipped, tracking Wall Street's routon Friday after a stronger-than-expected U.S. jobs report boosted bets that the Fed will raise rates by year-end.
"A triple threat of intensifying AI anxieties, rising Fed rate hike expectations, and bleak geopolitical news battered markets on Monday," InTouch Capital Markets' analysts' team said in commentary.
South Korea's Kospi led losses in Asia, falling 5.6%. Chip stocks including bellwether Samsung Electronics dropped 6.2% and SK Hynix fell 3.2%.
The Korea Exchange suspended trading in Kospi futures for 20 minutes and Kosdaq futures for five minutes after futures contract fell more than 8%.
Japan's Nikkei Stock Average was down 4.0%, Hong Kong's Hang Seng Index fell 1.2% and China's Shanghai Composite shed 1.3%.
Write to Ronnie Harui at ronnie.harui@wsj.com
(END) Dow Jones Newswires
June 08, 2026 01:11 ET (05:11 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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