Brent crude oil prices are nearing $100 a barrel after the United States conducted strikes on Iranian tankers. These attacks occurred near the Kharg Island export hub and in the Gulf of Oman. This development is contributing to heightened concerns about the disruption of energy flows, particularly through the Strait of Hormuz.
The broader geopolitical context includes escalating tensions in the Middle East. On September 2nd, the UAE reported an Iranian missile attack, and Israel-Turkey tensions were also noted. Earlier in the month, on September 1st, oil prices initially rose to $91 a barrel due to hostilities between the US and Iran and concerns over energy flow disruptions. President Trump had dismissed these events as a "little war" but signaled potential military escalation.
The US actions are reportedly constrained by a low supply of munitions and regional opposition to the ongoing state of affairs, which is negatively impacting economies. Despite these constraints, both the US and Iran are reportedly using military means to assert their desired control over the Strait of Hormuz. Incidents in the preceding 12 hours included a ship being hit by three projectiles near Oman and another military-involved incident reported by the UK Navy.
In addition to the oil market, other financial news from early September included Shein struggling in its Hong Kong debut, with shares falling after failing to IPO in New York and London. Nvidia made a significant direct investment outside the US, a $3.5 billion investment in MediaTek, a Taiwanese chipmaker, which both CEOs discussed as a long-term strategic partnership. Yen traders are also on alert for intervention as the currency breached the 160 level against the US dollar, with the Bank of Japan expected to raise rates aggressively.
