Oil crosses $100 as Hormuz shipping disrupted
International oil prices pushed past $100 a barrel for the first time since May as the expanding US-Iran war disrupted shipping through the Strait of Hormuz. Brent crude jumped more than 6% after Iran-backed Houthi rebels attacked two Saudi oil tankers in the Red Sea. Economists warned that the combination of high oil prices and new tariffs would raise costs for consumers on everything from gasoline to groceries.
The US government also revoked Iran's ability to sell crude oil on global markets, removing roughly 1.5 million barrels per day of supply from an already tight market. Shipping companies began adding fuel surcharges, and analysts predicted diesel costs could rise sharply in the coming weeks.
Trump replaces expiring tariffs with new levies
President Trump imposed a new round of tariffs overnight, replacing expiring levies with fresh duties ranging from 10% to 12.5% on goods from much of the globe. The new tariffs target allies and rivals alike, including a 50% tariff on Canadian imports like hockey sticks and wine. The administration's trade chief described the move as "business," but European and Asian leaders condemned the escalation.
The tariffs come at a time when the global economy is already under pressure from the oil shock. Bond markets reacted with the 30-year yield extending its run above 5%, the longest stretch since before the 2008 financial crisis, as inflation fears reignited.
Asian markets tumble, FTSE 100 hits record
Asian stock markets took a beating, with Japan's Nikkei 225 falling 3.1%, Hong Kong's Hang Seng dropping 11.4%, and South Korea's Kospi plunging 6.2%, dragged down by chip makers. In contrast, the UK's FTSE 100 hit a record high, boosted by oil stocks and weaker commodity prices. The conflicting signals reflect deep uncertainty about how the combination of war, tariffs, and inflation will play out.