Crude oil prices have rocketed above $115 a barrel after the US and Iran exchanged fire, shattering a fragile ceasefire amid weeks of escalating tensions. Following stalled April peace talks, naval blockades, and ship seizures in the Strait of Hormuz, the clash has intensified fears of broader Middle East conflict, threatening global energy supplies and stoking market volatility.
Asian shares opened mixed on Tuesday, May 4, as the US-Iran flare-up propelled crude oil above $115 a barrel, building on April's volatility that saw prices swing from below $95 to over $110 amid truce hopes and blockade threats. Officials confirmed the exchange of fire ruptured the ceasefire US President Donald Trump had extended indefinitely late last month, per reports from The Economic Times. The incident underscores vulnerabilities in the Strait of Hormuz—a chokepoint for global energy and fertiliser flows—exacerbating concerns over supply disruptions that began with Iran's ship seizures and the US naval presence. Analysts warn of heightened geopolitical risk premia, with potential knock-on effects for industrial activity, inflation, supply chains, and commodity costs worldwide. US equity futures reflected caution, mirroring April's sentiment swings, while no resolution has emerged. Energy markets brace for prolonged volatility if tensions persist, potentially pushing prices toward $120 or higher.
