Oil Rises, Asian Equities Fall Amid Widening Middle East Conflict
By Sherry Qin
Oil prices rose and Asian equities fell broadly early Monday as the widening conflict in the Middle East squeezed global oil supplies.
Last week, Saudi Arabia shut down a crucial pipeline that can carry up to 7 million barrels of crude following multiple drone attacks from Iraq. That came as Iran-backed Houthi militants seized a key territory in Yemen around the strategic Bab al-Mandeb Strait, giving control of two of the most important shipping chokepoints in the Middle East to Iran and a key ally.
"Signs that the conflict is spreading across the Middle East and impacting oil flows" are pushing up oil prices, ANZ Research analysts said in a note.
Saudi Arabia's crude-oil production fell to its lowest level in more than three decades in August, dropping by 2.3 million barrels a day to 6 million barrels a day, the International Energy Agency said in a report Friday. The kingdom produced around 9.4 million barrels a day on average last year.
Front-month WTI crude oil futures were recently up 2.7% at $102.78 a barrel, while Brent crude oil climbed 2.9% to $107.67 a barrel, according to ICE data.
Investors are focusing on the Federal Reserve's rate decision this week after data Friday showed that inflation in the U.S. rose 3.4% in August, with the key core prices coming in higher than expectations.
Analysts have priced in an around 90% chance of a hike after a hawkish Jackson Hole Speech by Fed chairman Chair Warsh and the elevated pressure from energy prices.
"We still think raising rates may end up being a policy error, but at the same time, doing nothing will be problematic given Warsh's repeated view that "inflation is a choice," MUFG analysts said in a note.
Asian equities were broadly lower in early trading. South Korea's Kospi fell 2.9% and Japan's Nikkei Stock Average tumbled 1.5%. Taiwan's Taiex fell 1.65% and Hong Kong's Hang Seng Index edged 0.2% lower.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
September 13, 2026 21:58 ET (01:58 GMT)
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