Stocks rise, oil climbs after US-Iran clashes

Stocks mostly rose while oil prices climbed today after the United States and Iran exchanged fire over the weekend, underscoring the fragility of their tentative agreement to end the war.

While Washington said it agreed with Iran to halt the attacks and continue talks, the strikes again disrupted shipping through the vital Strait of Hormuz over the weekend.

Oil prices, which last week fell to pre-war levels, rose modestly.

“The impact on oil prices remains relatively contained,” says Ipek Ozkardeskaya, senior analyst at Swissquote.

“News that some key markets have even turned oversupplied thanks to the release of strategic reserves and oil tankers quietly making their way out of Hormuz has certainly helped investors react more moderately to the latest escalation,” she adds.

But Trade Nation analyst David Morrison notes that it appears that Tehran still wants to charge vessels a fee for transiting the Strait of Hormuz, which would be illegal under international law.

“This would be a step too far for the Trump administration,” he notes, while the US president also appears to be increasingly desperate to end the war and reopen the strait as US midterm elections approach.

“The danger is that he may have to resume hostilities to have any chance of getting what he wants,” Morrison says.