Oil rises as U.S. stock futures, Asian shares slip after American strike on Iran
NEW YORK — The price of oil rose and U.S. stock futures fell as global markets reacted to the American bombing of nuclear targets in Iran.
The price of Brent crude oil, the international standard, rose 2.6% to $79 a barrel. U.S. crude rose 2.6% to $75.76 a barrel.
U.S. forces attacked three Iranian nuclear sites early Sunday, further increasing the stakes in the war between Israel and Iran.
Futures for the S&P 500 and the Dow Jones industrial average slipped 0.4%, while Nasdaq futures fell 0.5%. Treasury yields were little changed. The modest moves indicate markets are taking the latest development in stride.
That was evident in early trading in Asia. Tokyo's Nikkei 225 index fell 0.6%. Other major regional markets also logged moderate declines.
The conflict, which began with an Israeli attack against Iran on June 13, has sent oil prices yo-yo-ing, which has in turn caused seesaw moves for the U.S. stock market because of rising and ebbing fears that the war could disrupt the global flow of crude. Iran is a major producer of oil and sits on the narrow Strait of Hormuz, through which much of the world's crude passes.
'The situation remains highly fluid, and much hinges on whether Tehran opts for a restrained reaction or a more aggressive course of action,' Kristian Kerr, head of macro strategy at LPL Financial in Charlotte, N.C., said in a commentary.
An Iran retaliation that includes closing off the waterway would be technically difficult to pull off, but traders are afraid Iran could severely disrupt transit through it, sending insurance rates soaring and making shippers nervous to move without U.S. Navy escorts.
Some analysts think Iran is unlikely to close down the waterway because the country uses it to transport its own crude, mostly to China, and oil is a major revenue source for the government.
'It's a scorched-earth possibility, a Sherman-burning-Atlanta move,' said Tom Kloza, chief market analyst at Turner Mason & Co. 'It's not probable.'
Kloza thinks oil futures will ease back down after initial fears blow over.
Ed Yardeni, a longtime analyst, agreed, writing in a report that Tehran leaders would probably hold back.
'They aren't crazy,' he wrote in a note to investors Sunday. 'The price of oil should fall and stock markets around the world should climb higher.'
Other experts aren't so sure.
Andy Lipow, a Houston analyst who has covered oil markets for 45 years, said that countries are not always rational actors and that he wouldn't be surprised if Tehran lashed out for political or emotional reasons.
'If the Strait of Hormuz was completely shut down, oil prices would rise to $120 to $130 a barrel,' said Lipow, predicting that that would translate to about $4.50 a gallon at the pump in the U.S. and hurt consumers in other ways.
'It would mean higher prices for all those goods transported by truck, and it would be more difficult for the Fed to lower interest rates,' he said.
In trading early Monday in Asia, Taiwan's Taiex fell 1.5% while the Kospi in South Korea lost 1%. Both Taiwan and South Korea rely heavily on oil imported through the Strait of Hormuz.
Australia's S&P/ASX fell 0.7%, and the benchmark in New Zealand lost 0.5%.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
33 minutes ago
- Yahoo
What is the Strait of Hormuz and why is it so significant?
While there have been no major disruptions to the global oil supply so far, the attacks on Iran – by Israel and then the US – have rattled investors, sending oil futures soaring by around 10%, among fears Iran could retaliate by disrupting shipping in the Strait of Hormuz. From the perspective of the global economy, there are few places as strategically important. The waterway, located between the Persian Gulf and the Gulf of Oman, is only 21 miles wide at its narrowest point. It's the only way to ship crude from the oil-rich Persian Gulf to the rest of the world. Iran controls its northern side. About 20 million barrels of oil, about one-fifth of daily global production, flow through the strait every day, according to the US Energy Information Administration (EIA), which called the channel a 'critical oil chokepoint.' On Sunday evening, following US airstrikes on three of Iran's nuclear facilities, Brent crude, the global benchmark, briefly surged above $80 per barrel, according to Refinitiv data, the first time that's happened since January. Before the conflict, prices had largely hovered between $60 and $75 a barrel since August 2024. Brent last traded at $78.2 per barrel, while WTI, the US benchmark, was at $75.06. Whether oil prices will climb further now depends on Iran's response. Rob Thummel, senior portfolio manager at energy investment firm Tortoise Capital, told CNN that a potential disruption to the Iran-controlled sea route would cause oil prices to surge toward $100 per barrel. A functioning Strait of Hormuz is 'absolutely essential' to the health of the global economy, he said. A prominent adviser to Iran's supreme leader, Ayatollah Ali Khamenei, has already called for the closure of the Strait. 'Following America's attack on the Fordow nuclear installation, it is now our turn,' warned Hossein Shariatmadari, the editor-in-chief of the hardline Kayhan newspaper, a well-known conservative voice who has previously identified himself as a 'representative' for Khamenei. Geographic leverage over global shipping gives Iran the 'capacity to cause a shock in oil markets, drive up oil prices, drive inflation, collapse Trump's economic agenda,' Mohammad Ali Shabani, an Iran expert and editor of the Amwaj news outlet, told CNN. When it comes to moving oil, the Strait is actually much narrower than its 21-mile official width. The navigable shipping lanes for massive supertankers are only about two miles wide in each direction, requiring vessels to pass through both Iranian and Omani territorial waters. But Vandana Hari, founder and CEO of Vanda Insights, which tracks energy markets, sees Iran's blocking of the Strait as a 'remote tail risk.' The presence of a beefed-up US naval fleet in the region is both a deterrent and a response tool, she said. 'Iran has a lot to lose and very little, if anything, to gain by attempting to close the Strait,' Hari said. 'Iran cannot afford to turn its oil-producing neighbors, who have been neutral or even sympathetic towards the Islamic Republic as it faced Israeli and US attacks, into enemies, any more than trigger the ire of its main crude market, China.' A closure of the Strait would be particularly detrimental to China and other Asian economies which rely on the crude oil and natural gas shipped through the waterway. The EIA estimates that 84% of the crude oil and 83% of the liquefied natural gas that moved through the Strait of Hormuz last year went to Asian markets. China, the largest buyer of Iranian oil, sourced 5.4 million barrels per day through the Strait of Hormuz in the first quarter this year, while India and South Korea imported 2.1 million and 1.7 million barrels per day, respectively, according to the EIA's estimates. In comparison, the US and Europe imported just 400,000 and 500,000 barrels per day, respectively, in the same period, according to the EIA. On Sunday, India's Minister for Petroleum and Natural Gas Hardeep Singh Puri sought to reassure jittery investors on X that the country has 'diversified' its oil supplies in the past few years. On Sunday, India's Minister for Petroleum and Natural Gas Hardeep Singh Puri said on X that the country has 'diversified' its oil supplies in the past few years. 'A large volume of our supplies do not come through the Strait of Hormuz now. Our Oil Marketing Companies have supplies of several weeks and continue to receive energy supplies from several routes,' he said. 'We will take all necessary steps to ensure stability of supplies of fuel to our citizens.' CNN's John Towfighi, Nadeen Ebrahim, and Rhea Mogul contributed reporting.
Yahoo
an hour ago
- Yahoo
Emerging Assets Drop as US Strike on Iran Fans Worries About Oil
(Bloomberg) -- Asian currencies and stocks fell at the start of the week, as US strikes on Iran rattled investors and pushed up the price of oil. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice One Architect's Quest to Save Mumbai's Heritage From Disappearing NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports South Korea's won led the drop among currencies, contributing to the 0.3% fall in the Bloomberg Asia Dollar Index. Indonesia's rupiah also declined, and the country's central bank confirmed it had intervened both on- and offshore to arrest the slide. On the equities front, MSCI's EM equities gauge dropped 1%. President Donald Trump's decision to attack three Iranian nuclear sites opens a new front in the conflict between Israel and Iran, which has stoked concerns fears that energy supplies from the Middle East will be disrupted. That's a particular concern for economies in Asia, many of whom import the lion's share of their fuel supply. 'Our analysis shows that the Philippine peso, Korean won and Thai baht are more vulnerable in Asia' to oil-price spikes, Mitsubishi UFJ Financial Group, Inc. analysts led by Michael Wan wrote in a note. 'Further increases in oil prices could start to impact the policy space of the Philippines and Vietnam, and to a smaller extent India,' delaying central bank interest rate cuts. The moves also risk upending the rally in local currency bond markets, which registered strong inflows as global funds shied away from US assets and the dollar weakened. The Strait of Hormuz is a choke-point for Mideast oil, and investors are watching for any signs it gets blocked. Tehran has warned of retaliation. Reflecting the potential fallout, the 30-day correlation between Brent oil futures and the Asia Dollar Spot Index is now at its most negative since March 2022, with a reading of -0.45, according to Bloomberg calculations. Wells Fargo & Co. sees the Indian rupee, as well as the won, baht and peso, as potentially the worst hit. Long positioning potentially is most extended for the won, followed by the baht, which could contribute to a relatively poor performance in the short term, said Chidu Narayanan, head of macro strategy for APAC at the firm. On the equities front, Taiwan's exchange posted some of the biggest declines. Chip stocks sold off on fears the US may revoke waivers allowing firms to ship American technology to China. Investors were 'running full tilt in the direction of EM' at the time Trump announced the US strikes, Robin Brooks, a senior fellow in the global economy and development program at the Brookings Institution, wrote in a note. 'This heightens the risk of a violent reversal in these flows, which could cause EM currencies to weaken sharply.' --With assistance from Jaehyun Eom, Swati Pandey and Bhaskar Dutta. Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Journals
an hour ago
- Business Journals
3 simple steps for employers to lower health care costs and ensure better employee care
It's no secret that the current health care system is unsustainable. Nearly half of Americans receive health care coverage through their employer and over the past two decades, employer-sponsored health care costs have risen by over 200%. Many businesses can no longer front the costs — and the burden is being shifted onto employees. The result? Health care has become unaffordable for many working Americans — for some employees cost shifting has made engaging care unaffordable and 40% of American adults are struggling with medical debt — a shockingly high number. Despite this astronomical rise in cost, most brokers and benefits consultants haven't changed the solutions they present to clients in decades. In our experience, only about 5-10% of brokers are offering their clients innovative alternatives and even fewer have fully embraced a different approach, leading to poor implementation and support when they do try something new. The reality is that health care operates as an inefficient market. Unlike most industries, higher costs do not necessarily equate to higher quality care — in fact, it can often be the opposite. We believe that by being proactive, transparent and strategic, employers can reverse this trend by reducing costs while ensuring their employees receive top-quality care. However, achieving transformational results demands a completely different approach. The four of us have spent years in this industry and have tailored a unique approach that enables us to achieve superior results. We've seen what works and what doesn't and the ineffective options continually peddled to employers. That's why we've joined forces to help employers to take control of their health care spend and save real money. Our approach We don't believe in a one-size-fits all health plans and we partner with HR leaders to bring their health care strategy to life while directly administering the change. This includes educating employees on what they need to know to make the most of their benefits. When you show people exactly how they can receive better care at a lower price, everyone wins. Our model is built on three pillars: education, pharmacy platform and Medicare Plus. Education: We empower members to navigate the health care system effectively and steer them towards high quality and cost-effective options. Navigating the health care system is hard and we take a hands-on approach, which helps members understand their choices and make informed decisions. This extra effort improves health outcomes while ensuring the best experience possible. According to publicly available data compiled by Image360, CT scans in Tampa, Florida, are typically billed between $4,500 and $9,700. Even after PPO discounts, health plan members and businesses still pay $2,200 to $4,800. The problem is, there's little transparency in pricing and high cost doesn't guarantee high quality. Imagine360 changes that. With Imagine360, the average cost for the same CT scan at the same facility drops to under $200. This translates to significant savings for the employee and the business. Pharmacy platform: Pharmacy spend is the fastest-growing expense when it comes to a health plan. Traditional solutions often lack transparency and instead function as profit centers. We craft innovative solutions to manage pharmacy costs, ensuring that members have access to affordable medications without compromising on quality. Medicare Plus: We provide a thoughtful alternative to conventional PPOs. This model offers robust coverage at significantly lower costs by anchoring reimbursements to fair, Medicare-based rates. The above approach collectively has proven to cut costs by nearly 25% on average. Through this approach, we've reduced the cost of health care so drastically that some clients now offer no-cost health care to all of their employees. At a time when most companies are forcing employees to pay upwards of thousands of dollars per month on health insurance premiums, our clients pick up the full cost of premiums for their employees. This difference is life-changing for many families. By adopting a three-pillar approach to health care benefits, these businesses have become highly sought-after employers in their communities. And it's not just beneficial for employees — it's advantageous for the health plan as well. When health care premiums are overpriced, only the highest utilizers enroll, which makes sense; you would only pay thousands of dollars a month in premiums if you anticipated high health care expenses. However, when coverage is affordable and well-structured, everyone participates, creating a healthier, more predictable and sustainable plan. If this sounds too good to be true, you're not alone. One employer came to us frustrated and skeptical. Every broker had pitched the same traditional solutions, none of which solved their problem. Their chief financial officer knew that if they could not control hospital claims costs, the business would be in trouble. We introduced Medicare Plus pricing as a strategic solution. We helped manage the learning curve for the first few months — but once leadership committed to the solution, the plan started working. Three years in, premiums, deductibles and copays have all dropped. Employees are getting better coverage, and the company has even added new benefits — while most of their peers are cutting back. Using an independent TPA Working with an independent third-party administrator (TPA) opens the door to a different and better playbook. Yes, it takes more work upfront — more education, communication, teamwork — but the payoff is worth it: a more flexible employee benefits solution that can lead to better care, lower costs, and long-term consistency. No more carrier swaps or yearly overhauls. We currently support 25 clients on this platform. With dedicated service teams, personalized enrollment education and long-term strategies, we help employers innovate — without impacting employee satisfaction. The result is a smoother, more positive experience. The road ahead We're all fighting the same fight: pushing back against a system that hides cost, limits choices, wastes money and is driving people to choose little or no coverage due to cost. But it doesn't have to be this way. With a three-pronged approach including employee education, pharmacy and Medicare Plus pricing, we're helping employers take back control of their health care costs. By putting people first and staying committed to value-based solutions, employers and brokers can finally break free from the old playbook — and build something better. McGriff is a Marsh & McLennan Agency LLC Company. Our solutions include commercial property and casualty, corporate bonding and surety, cyber, executive risk, management and professional liability, captives and alternative risk transfer programs, employee benefits, small business and personal lines insurance.
