Oil Prices Waver as Renewed U.S.-Iran Tensions Keep Middle East in Focus — Update

By Ronnie Harui and Kimberley Kao

Oil prices wavered Thursday after fresh U.S. strikes on Iran renewed concerns over supply disruptions in the Middle East.

American military forces launched new strikes on Iran Wednesday night, according to the U.S. Central Command, hours after President Trump announced the end of an eight-week ceasefire. The strikes, the second round in just 24 hours, pose the strongest threat yet to derail efforts to reach a permanent peace deal between the U.S. and Iran.

Besides ordering strikes on Tuesday, Trump revoked a license permitting Iran to sell oil on the open market. The latest escalation began earlier this week when Iran launched missiles and drones on three ships transiting the Strait of Hormuz, a critical waterway through which one-fifth of the world's oil is transported.

Oil futures erased earlier gains. Front-month West Texas Intermediate crude oil futures were recently down 0.5% at $73.16 a barrel, while front-month Brent crude oil futures down 0.4% at $77.73 a barrel, according to ICE data.

WTI crude oil is likely to remain highly volatile in the short term, said Linh Tran, a market analyst at XS.com. If U.S.-Iran tensions persist or escalate further, oil prices could move toward $78-$80 per barrel. However, if risks ease, "the market could quickly shift its focus back to fundamental factors such as rising U.S. inventories, high domestic production, and OPEC+'s plan to increase output," limiting WTI's upside, Tran said.

Government bonds across the Asia-Pacific fell in price terms as the continued rise in crude oil prices fueled concerns over elevated inflation in the region.

Global bond yields rose as markets weighed up a renewed energy shock, said Ken Crompton, head of Rates Strategy at National Australia Bank.

Japan's 10-year government bond yield was last 1.0 basis point higher at 2.880%, after hitting the highest intraday level since September 1996, according to data provider Quick.

Yields on Australia's 10-year sovereign debt were flat at 4.8760%, while New Zealand's 10-year government bond yield was up 7 basis points at 4.5860%.

Bond yields move inversely to prices.

Asian equity markets were mixed. South Korea's Kospi ended 0.6% higher after sharp losses Wednesday dragged the benchmark into bear-market territory. The Nikkei Stock Average rose 1.4%, led by gains in chip stocks, and China's Shanghai Composite Index was recently up 1.0%.

Meanwhile, Hong Kong's Hang Seng Index was down 0.8% and Taiwan's Taiex was 0.8% lower.

Asian airline stocks declined on the renewed Middle East tensions. Cathay Pacific lost 4.1%, Singapore Airlines fell 1.8% and Korean Airlines declined 4.2%.

Broader risk appetite has weakened, and markets will "remain highly headline-driven in the near term, with oil once again acting as the key macro anchor," Sucden Financial said.

Write to Ronnie Harui at ronnie.harui@wsj.com and Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

July 09, 2026 03:12 ET (07:12 GMT)