Oil prices surge on Strait of Hormuz supply-risk fears

KUALA LUMPUR, 7 AUGUST 2026 —

Oil prices rallied on Thursday as reports of a potential ban on US and Israeli vessels using the Strait of Hormuz stoked supply-risk concerns.

Brent crude added 3.8% to top US$85 a barrel while West Texas Intermediate climbed 2.9% to US$81.40, paring some of the prior session’s losses after the US Federal Reserve signalled scope for smaller interest-rate cuts. The gains reflected concern that any restriction at the Strait—through which one-fifth of seaborne oil passes—would tighten global supply, according to John Kilduff, partner at Again Capital.

“This situation is far from settled and the market is merely taking some optimism off the table,” he said.

The advance weighed on equities: the Dow Jones Industrial Average slipped 0.2% from a record close while the Nasdaq ended little changed as investors positioned ahead of Friday’s US jobs report. European bourses finished mixed. London’s FTSE 100 fell 0.2%, while Frankfurt’s DAX and Paris’s CAC gained 0.4% and 0.3% respectively, leaving fresh highs out of reach.

“Rising oil has clipped some of the week’s earlier enthusiasm, but the price remains well below last week’s peaks, which should still support risk appetite as August progresses,” said Chris Beauchamp, chief market analyst at IG.

In London, shares of Diageo jumped 7% after the drinks giant outlined a cost-cutting programme aimed at reversing profit declines. In Frankfurt, Siemens slid 5% after its profit guidance disappointed, though it recovered more than half the loss by the close.

Across Asia, tech-heavy benchmarks were under pressure after weak quarterly results from US chip firms SanDisk and Western Digital raised questions over AI-investment profitability. Seoul’s Kospi dropped 4.2%, led by a 10% plunge in SK hynix and a 6.5% fall in Samsung Electronics. Tokyo’s Nikkei lost 0.9%, with Kioxia down 10.3% and Tokyo Electron down 5.2%. Hong Kong, Wellington, Manila and Taipei also fell, while Shanghai, Sydney and Singapore edged higher.

For Malaysian businesses, the Strait of Hormuz development matters because the waterway carries roughly one-fifth of global seaborne crude exports, and any disruption would push regional fuel costs higher.