HONG KONG, July 8, (v7n) – Oil prices extended a rally on Wednesday as fresh US military strikes on Iran reignited Middle East tensions, raising concerns over peace talks and the full reopening of the strategic Strait of Hormuz after attacks on three vessels.

US Central Command said the "powerful" strikes on Iran were in response to attacks on commercial ships transiting the strait and would "impose heavy costs for targeting and attacking commercial shipping." The vessels were struck near Oman, which had proposed a temporary transit corridor—an initiative opposed by Tehran as it seeks to impose fees on ships using the waterway.

Iran's foreign ministry accused the US of repeatedly violating a bilateral memorandum of understanding and threatened to "take decisive measures to protect its interests and national security." The strikes came shortly after Washington revoked a temporary sanctions waiver for Iranian oil.

Both main crude contracts jumped more than two percent Wednesday, hitting two-week highs. Security expert Andreas Krieg of King's College London said Iran is determined to enforce its toll system, adding: "Iran is sending a clear signal that no alternative will be accepted."

The geopolitical flare-up compounded a global tech sell-off driven by concerns over stretched valuations and the slow payoff from massive AI investments. Seoul's Kospi sank more than one percent, extending losses to over 20 percent from last month's record high. Samsung fell again after Tuesday's rout, despite forecasting a more than 1,800 percent profit surge on AI chip demand.

Losses were also seen in Tokyo, Shanghai, Sydney, Singapore, Wellington, and Taipei, though Hong Kong rose more than one percent. AT Global Markets' Nick Twidale noted: "After AI and tech sentiment had dominated market moves... investors are now forced to move back to focusing on geopolitical tensions."

The dollar strengthened as supply concerns fuelled fears of sustained inflation, potentially pressuring the Federal Reserve to raise interest rates. West Texas Intermediate traded at $72.03 and Brent at $75.76 per barrel.

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