Tensions Explode in Middle East — Oil Surges, Asia Markets Shaken

Asian markets traded unevenly on Friday, with investor sentiment hanging in the balance as uncertainty looms over possible U.S. involvement in the deepening Israel-Iran conflict. Oil prices made modest gains, reflecting persistent concerns about potential disruptions to global supply routes.

U.S. crude climbed 15 cents, trading at $73.65 per barrel, while Brent crude rose 19 cents to reach $76.89. The oil market has been swinging as geopolitical tensions create anxiety over the stability of the Strait of Hormuz—a key channel for international oil exports, especially those coming from Iran.

With Wall Street closed on Thursday for the Juneteenth holiday, U.S. futures opened slightly lower as traders returned to weigh the risks of broader military escalation.

Market unease has grown following signals that Washington may soon decide whether to intervene militarily. Although diplomatic channels remain active, the possibility of U.S. action adds another layer of volatility to already fragile global markets.

Japan’s Nikkei 225 rose slightly by 0.1%, finishing at 38,538.14. That came after official data showed core inflation—excluding food—rose to 3.7% in May, placing more pressure on Japan’s central bank and government to manage growing price challenges amid external trade concerns.

In contrast, Hong Kong’s Hang Seng index posted a stronger gain, up 1.2% to 23,504.59. China’s Shanghai Composite reversed early losses to end 0.1% higher at 3,364.83. China's central bank kept its main lending rates steady, in line with expectations and suggesting a wait-and-see approach to current economic conditions.

Australia’s benchmark ASX 200 fell 0.3% to 8,500.40, dragged by weaker commodity stocks. Meanwhile, South Korea’s Kospi index added 1.2%, lifted by cautious optimism despite regional tensions.

Traders across the region were largely hesitant, keeping risk exposure limited amid ongoing concerns in the Middle East. The possibility of conflict disrupting oil flow or triggering broader instability remains a key focus.

The Bank of England, meanwhile, opted to hold interest rates at 4.25%, pointing to potential spillover risks from the Israel-Iran standoff as a reason for maintaining a cautious stance.

In currency trading, the dollar slipped slightly to 145.28 yen, while the euro edged up to $1.1530.

Markets are likely to remain in a holding pattern until there’s more clarity on how the geopolitical situation will unfold—and whether the U.S. chooses to take military action or keep to diplomatic channels.

Also Read: Oil Nears $78 as U.S. Threatens Iran Strike Over Gulf Crisis