Global oil prices climbed again on Tuesday as tensions escalated around the Strait of Hormuz, with several countries resisting calls from Donald Trump to help secure the critical waterway, which Iran has effectively shut.
The latest gains partly offset sharp losses recorded a day earlier after International Energy Agency (IEA) suggested that additional oil stockpiles could be released if necessary.
Despite the geopolitical strain, global equities extended gains from Monday, buoyed by a rally in tech stocks after Nvidia projected it could generate at least $1 trillion in revenue by the end of 2027.
Investors are also closely watching upcoming central bank decisions this week, with expectations that interest rate hikes may resume to counter inflationary pressures driven by rising crude oil prices.
Over the weekend, Trump urged European and other allies to collaborate in reopening the Strait of Hormuz, describing it as a shared responsibility. However, the response has been muted. German Chancellor Friedrich Merz stated that the conflict sparked by US-Israeli strikes on Iran was not a NATO issue, while countries including Britain, Spain, Poland, Greece, and Sweden distanced themselves from the proposal. Australia and Japan also declined involvement.
Trump warned that refusal to act could negatively impact the future of NATO and indicated he had postponed a planned summit with Chinese President Xi Jinping over the situation.
With no clear resolution in sight, both major oil benchmarks surged more than two percent, hovering around $100 per barrel.
Earlier declines had followed comments by IEA chief Fatih Birol, who noted that member nations could tap into strategic reserves if required, after already approving a record release of 400 million barrels.
Market sentiment was also supported by reports from Marine Traffic indicating that a Pakistani oil tanker successfully passed through Hormuz—the first non-Iranian vessel to do so with its tracking system active.
However, instability in the region persists. Drone strikes hit major oil facilities in the United Arab Emirates and Iraq, while Israel reported extensive strikes in Tehran and attacks targeting Hezbollah positions in Beirut. Additionally, a drone and rocket attack targeted the US embassy in Baghdad early Tuesday.
Stock markets across Asia continued to climb, defying the spike in oil prices, with Seoul leading gains amid strong performances by semiconductor giants. Other major markets, including Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Taipei, and Manila, also recorded notable increases, following positive closes on Wall Street.
Still, analysts remain cautious. Chris Weston of Pepperstone noted that confidence in a sustained rally in risk assets remains low, warning that recent developments do not yet signal a clear de-escalation of tensions or a lasting reduction in energy market risks.
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