Oil prices jumped on Monday after a reported Iranian drone and missile attack on the United Arab Emirates and the passage of U.S. warships through the Strait of Hormuz heightened concerns over energy supplies.
Brent crude for July delivery rose more than 5% after a drone strike caused a fire at an energy facility in the emirate of Fujairah, authorities said. The UAE defence ministry later said the country was targeted by Iranian drones and missiles.
Earlier, the U.S. Navy said its destroyers had transited the Strait of Hormuz as part of a newly announced escort mission, days after President Donald Trump unveiled the plan. Iran’s state television said its navy fired a cruise missile as a “warning,” while Emirati officials reported that drones had struck one of their oil tankers.
The escalation comes amid an ongoing U.S.-Israeli military campaign against Iran that began on Feb. 28. Tehran has effectively shut the strait – a vital route for global oil and gas shipments – while Washington maintains pressure on Iranian ports. A temporary ceasefire has been extended, but the broader conflict and its economic fallout remain unresolved.
Asian technology shares rallied
Equity markets showed mixed reactions. Asian technology shares rallied, pushing Seoul up more than 5% and Taipei over 4% to record highs, supported by strong earnings in the artificial intelligence sector.
However, U.S. stocks retreated from record levels, with the tech-heavy Nasdaq slipping into negative territory as oil prices surged.
Strong quarterly results from major technology firms, including Apple, Microsoft, and Samsung, have revived investor appetite for AI-linked stocks. Companies in the S&P 500 are on track to post earnings growth of 27.1%, the fastest pace in more than four years, according to FactSet.
London were shut for holidays
Still, analysts cautioned that elevated valuations could leave markets vulnerable. “There is optimism that AI continues to mask the pain elsewhere,” said Ipek Ozkardeskaya, an analyst at Swissquote.
In Europe, Paris and Frankfurt both closed down more than 1%, while Tokyo, Shanghai and London were shut for holidays.
In currency markets, the yen strengthened sharply against the dollar, fuelling speculation of further intervention after reports that Japanese authorities spent billions last week to support the currency.
