Asian energy stocks saw a significant improvement on Thursday with rising oil prices. This price increase was driven by new concerns about oil supply from the Middle East, especially following renewed tensions between the United States and Iran. Brent crude oil rose by 3.9% to $103.08 per barrel, while West Texas Intermediate also increased by 1.8% to $92.16.
Political Tensions' Impact on Energy Markets
The price increase followed statements by Masoud Pezeshkpour, the President of Iran, asserting Tehran's refusal to yield to U.S. pressures. These remarks came a day after former U.S. President Donald Trump's threats against Iran. These developments have heightened concerns about potential disruptions in oil supply from this sensitive region.
Read more: Increase in oil transportation costs in the Persian Gulf due to Hormuz restrictions
Economic Indicators and Their Impact on the Market
Analysts believe that the increase in economic activity in the United States has also contributed to this upward trend. Business activity in the U.S. reached its highest level in over five years in September, leading to increased Treasury yields and bolstered expectations for interest rate hikes by the Federal Reserve at its upcoming meeting in October. The 10-year Treasury yield reached its highest level since 2007, putting additional pressure on the stock market overall.
Meanwhile, shares of CNOOC in Hong Kong rose by 2.1%, and Santos shares increased by 1.4%. Additionally, Woodside Energy shares rose by 1%. While CNOOC shares in Shanghai increased by 0.7% and Japan's Inpex shares rose by 0.3%, Inpex shares fell by 1.3% due to oil price volatility.
In this context, Saudi Arabia is working to rebuild its East-West pipeline after drone attacks disrupted the route. This pipeline is crucial for providing a route for transporting Saudi crude oil to the Red Sea and bypassing the Strait of Hormuz. Diplomatic efforts between the United States and Iran remain in focus.
Read more: TotalEnergies begins development of the Ima gas field in Nigeria · Interest rate hikes and oil price volatility push the dollar to a two-month high
