A worker fuels a customer's motorcycle at a gas station in Peshawar, Pakistan, on July 11 (local time). [EPA]
A worker fuels a customer's motorcycle at a gas station in Peshawar, Pakistan, on July 11 (local time). [EPA]

International oil prices surged more than 4% on Monday as the United States and Iran renewed hostilities over freedom of navigation through the Strait of Hormuz.

According to Bloomberg, Brent crude futures for September delivery were trading at $79.25 per barrel as of 1:46 p.m. Korean Standard Time, up 4.26 percent, or $3.24, from the previous session. Brent had traded at $76.01 per barrel on Friday before climbing more than $3 in three sessions. West Texas Intermediate futures for August delivery jumped 4.34 percent, or $3.10, to $74.51 per barrel.

Oil prices had been falling for several days after the US and Iran formally launched peace negotiations, but they reversed sharply after Iran attacked a vessel attempting to transit the Strait of Hormuz last week. The US responded with airstrikes on dozens of Iranian targets, ratcheting up tensions in the region.

Gold prices fell. Spot gold dropped 1.54 percent to $4,056.47 per ounce, while silver slid 2.78 percent to $58.20.

The dollar strengthened further, cementing its recent gains. The dollar index, which measures the greenback against six major currencies, rose 0.14 percent to 101.10, drawing close to its one-year high of 101.80 set on June 24.

Escalating tensions in the Middle East dragged equity markets lower across the board. Japan's Nikkei 225 was down 2.34 percent at 66,952.59 as of 1:45 p.m. local time Monday. China's CSI 300, which tracks the 300 largest stocks listed on the Shanghai and Shenzhen exchanges, also fell 1.97 percent.

Mini futures contracts for the Dow Jones Industrial Average, S&P 500 and NASDAQ 100 were each down between 0.4 percent and 1.4 percent, pointing to a lower open on Wall Street.


kate01@heraldcorp.com