Oil flip-flops and shares are mixed after the US strikes Iranian nuclear
sites
[June 23, 2025] By
ELAINE KURTENBACH and BERNARD CONDON
BANGKOK (AP) — Global markets appeared to take the U.S. strike against
nuclear targets in Iran in stride as investors watched Monday to see how
Iran will react.
The price of oil initially jumped more than 2% but later fell back,
losing about 0.4%. U.S. stock futures edged higher and share benchmarks
in Europe and Asia were mixed.
The big unknown is what Iran will do, analysts said, while the U.S.
military’s strike on three Iranian sites raised urgent questions about
what remains of Tehran’s nuclear program.
"I believe what we are thinking is or the thinking is that it is going
to be a short conflict. The one big hit by the Americans will be
effective and then we’ll get back to sort of business as usual, in which
case there is no need for an immediate, panicky type of reaction,” said
Neil Newman, managing director of Atris Advisory Japan.
By early morning in London, the price of Brent crude oil, the
international standard, had fallen 0.4% to $76.74 a barrel. U.S. crude
also fell back, giving up 0.3% to $73.59 a barrel.
The attacks Saturday raised the stakes in the war between Israel and
Iran. The future for the S&P 500 gained 0.2% while that for the Dow
Jones Industrial Average was up 0.1%. Treasury yields were little
changed.
In Europe, Germany's DAX was nearly unchanged at 23,347.90 and the CAC
40 in Paris also was flat at 7,588.54. Britain's FTSE 100 was up less
than 4 points at 8,778.96.
The conflict began with an Israeli attack against Iran on June 13 that
sent oil prices yo-yoing and rattled other markets.
Iran is a major oil producer and sits on the narrow Strait of Hormuz,
through which much of the world’s crude passes. Closing off the waterway
would be technically difficult but it could severely disrupt transit
through it, sending insurance rates spiking and making shippers nervous
to move without U.S. Navy escorts.
“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,
North Carolina, said in a commentary.
Iran may be reluctant to close down the waterway because it uses the
strait to transport its own crude, mostly to China, and oil is a major
revenue source for the regime.
Speaking to Fox News on Sunday, U.S. Secretary of State Marco Rubio said
disrupting traffic through the strait would be “economic suicide" and
would elicit a U.S. response.
"I would encourage the Chinese government in Beijing to call them about
that because they heavily depend on the Strait of Hormuz for their oil,”
Rubio said.
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A person walks in front of an electronic stock board showing Japan's
Nikkei index at a securities firm Monday, June 23, 2025, in Tokyo.
(AP Photo/Eugene Hoshiko)
 Tom Kloza, chief market analyst at
Turner Mason & Co said he expects Iranian leaders to refrain from
drastic measures and oil futures to ease back after the initial
fears blow over.
Disrupting shipping would be " a scorched earth possibility, a
Sherman-burning-Atlanta move,” Kloza said.
Writing in a report, Ed Yardeni, a long-time analyst, agreed that
Tehran leaders would likely 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 weren't so sure.
Andy Lipow, a Houston analyst who has covered oil markets for 45
years, said countries are not always rational actors and 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. That would translate to
about $4.50 a gallon at the pump and hurt consumers in other ways,
he said.
“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.”
Much of East Asia depends on oil imported through the Strait of
Hormuz. Taiwan's Taiex fell 1.4% while the Kospi in South Korea
initially lost 1% but then regained some lost ground to fall 0.2% to
3,014.17.
In Tokyo, the Nikkei 225 edged 0.1% lower to 38,354.09, with gains
for defense contractors, oil companies and miners helping to make up
for broad losses.
“The U.S. strike on Iran certainly is very good for defense
equipment,” Newman of Atris Advisory said, noting that both Japan
and South Korea have sizable military manufacturing hubs.
Australia's S&P/ASX fell 0.4% to 8,475.90.
Hong Kong's Hang Seng regained lost ground, climbing 0.7% to
23,689.13, while markets in mainland China advanced with gains for
energy companies. The Shanghai Composite index picked up 0.7% to
3,381.58.
In currency dealings, the U.S. dollar rose to 147.49 Japanese yen
from 146.66 yen. The euro climbed to $1.1490 from $1.1473.
___
AP Business Writer Bernard Condon in New York and AP video
journalist Mayuko Ono in Tokyo contributed.
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