Oil prices seesaw as investors await Iran response to US strikes

BSS

Published On: 23 Jun 2025, 14:28 Updated On:23 Jun 2025, 17:43

LONDON, June 23, 2025 (BSS/AFP) - Oil prices wobbled and stock markets
wavered Monday as traders awaited Tehran's response to US strikes on Iranian
nuclear facilities over the weekend.

European stocks mostly retreated while Asian equities were mixed, with
markets keeping a close eye on whether Iran will block the crucial Strait of
Hormuz, which carries one-fifth of global oil output.

When trading opened on Monday, international benchmark crude contract Brent
and US equivalent WTI both jumped more than four percent to hit their highest
price since January.

They later dipped briefly into the red before recovering to trade slightly
higher in midday trading.

"Will Iran choose to choke off the Strait of Hormuz or not? That is the big
question," said Bjarne Schieldrop, chief commodities analyst at SEB bank.

But, "looking at the oil price this morning it is clear that the oil market
doesn't assign a very high probability of it happening," he added.

Iran is the world's ninth-biggest oil-producing country, exporting just under
half of the 3.3 million barrels it produces per day.

Tensions remained elevated as Iran and Israel intensified attacks on each
other on the war's 11th day.

"The markets are not yet reacting with any degree of panic to the US
airstrike on Iran's nuclear facilities as they await to see how Tehran
responds," said AJ Bell investment director Russ Mould.

In Europe, Paris and Frankfurt stock markets both fell.

A closely watched survey showed Monday that eurozone business activity was
almost stagnant again in June.

London's stock exchange was flat, with the rise in crude prices boosting
shares in British energy majors BP and Shell.

But airlines, including EasyJet and British Airways-owner IAG, suffered
losses on fears of rising energy costs and disruptions in travel to the
Middle East.

In Asia, Tokyo was lower while Hong Kong and Shanghai gained.

"So far, satellite images reportedly suggest that oil continues to flow
through the Strait, which may explain the muted market reaction to the news,"
said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

She added that there is optimism that Iran will avoid full-blown retaliation
"to prevent its own oil facilities from becoming targets and to avoid a
widening conflict that could hurt China -- its biggest oil customer."

But "if things get uglier" the price of US crude could even spike beyond $100
per barrel, she said. Brent was trading at almost $78 per barrel on Monday
while WTI was close to $75.

The dollar rose against other currencies but analysts questioned to what
extent this would hold out.

- Key figures at around 1045 GMT -

Brent North Sea Crude: UP 0.9 percent at $77.73 per barrel

West Texas Intermediate: UP 0.9 percent at $74.52 per barrel

London - FTSE 100: FLAT at 8,772.82 points

Paris - CAC 40: DOWN 0.4 percent at 7,556.36

Frankfurt - DAX: DOWN 0.3 percent at 23,278.65

Tokyo - Nikkei 225: DOWN 0.1 percent at 38,354.09 (close)

Hong Kong - Hang Seng Index: UP 0.7 percent at 23,689.13 (close)

Shanghai - Composite: UP 0.7 percent at 3,381.58 (close)

New York - Dow: UP 0.1 percent at 42,206.82 (close)

Euro/dollar: DOWN at $1.1468 from $1.1516 on Friday