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Archives: Reuters Articles

Foreign investors pull from Asian stocks as AI-driven tech rout spreads

Foreign investors pull from Asian stocks as AI-driven tech rout spreads

Foreign outflows from Asian stocks rose sharply in the first week of February as South Korea and Taiwan came under pressure from a global selloff in high-growth technology shares on concerns over the hefty AI-related capital spending.

Foreign investors sold a net USD 9.79 billion worth of stocks in the week ended February 6, compared with roughly USD 3.9 billion net disposals in the whole of January, according to LSEG data for stock markets in South Korea, Taiwan, Thailand, India, Indonesia, Vietnam, and the Philippines.

The US Nasdaq Composite fell as much as 4.27% last week. Amazon slid about 12.11% on worries over a jump of more than 50% in its 2026 capital expenditures forecast, intensifying worries over AI-driven investment across the tech sector.

“This shift in sentiment weighed on Asia tech stocks as well,” Nomura said in a report.

Foreigners sold USD 7.48 billion worth of South Korean stocks in the week, compared with a monthly inflow of USD 446 million in January.

Taiwan stocks also suffered a net USD 3.43 billion foreign divestment in the most recent week after having received USD 306 million in foreign inflows last month.

“This past week’s moves in stocks reinforce, in our view, the message of maintaining some diversification and balance in portfolios, especially when positioning is crowded in some popular thematics,” the Nomura report said.

Cross-border investors, meanwhile, added a net USD 897 million worth of Indian stocks on optimism over a trade deal with the United States that cuts US tariffs on Indian goods to 18% from 50%.

Foreigners had sold USD 3.98 billion worth of Indian stocks in January, the most in five months.

“As such, it has to be assumed that the geopolitical cloud overhanging Indian equities, especially for foreign investors, has eased,” said William Bratton, the head of cash equity research, APAC at BNP Paribas.

“We see the near-term risk/reward balance (for India) as now firmly skewed to the upside,” BNP Paribas’ Bratton said.

Equities in Thailand, Indonesia, and the Philippines, meanwhile, attracted USD 332 million, USD 103 million, and USD 23 million, respectively, in foreign inflows last week.

Foreigners sold shares worth USD 236 million in Vietnam.

(Reporting by Gaurav Dogra in Bengaluru; Additional reporting by Patturaja Murugaboopathy; Editing by Janane Venkatraman)

 

Dollar soft ahead of US data, yen holds onto its gains after election

Dollar soft ahead of US data, yen holds onto its gains after election

SINGAPORE – The US dollar nursed steep losses on Tuesday ahead of a slate of economic data that will shape the interest rate path, while the yen held on to its gains in the wake of Prime Minister Sanae Takaichi’s resounding election victory.

Sterling was steady in early Asian hours after a volatile Monday as investors weighed the crisis facing Prime Minister Keir Starmer and rising wagers of further rate cuts. It last fetched USD 1.3682 after rising 0.6% in the previous session.

The Japanese yen was at 155.85 per US dollar, holding onto its overnight gains when it firmed 0.8%. Verbal warnings from authorities on Monday had helped strengthen the yen after the currency weakened in the immediate reaction to Takaichi’s victory.

Analysts expect the yen to weaken in the long run, noting the spotlight will soon be on Takaichi’s fiscal policies. The yen is down 6% since she took charge of the LDP in October.

“With fiscal policy set to loosen further under a bolder Takaichi administration, I think dollar-yen will ultimately resume strengthening, and we continue to forecast dollar-yen to increase to 164 by year-end,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

While the yen had retraced some of its recent losses against other currencies, on Tuesday it was back on a weakening trend against the Swiss franc and the euro.

“For a more sustained move lower, markets will want reassurance that fiscal policy will not become overly loose,” OCBC strategists said in a note.

“A firmer, more hawkish tone from the BoJ may also be needed to anchor expectations and drive a more durable decline in USD/JPY.”

The euro eased a bit to USD 1.19 after a 0.85% jump on Monday. The dollar index, which measures the US currency against six other units, was at 96.952, hovering near a one-week low.

Analysts said media reports that China has urged local banks to diversify from US Treasuries led to some dollar weakness.

DATA-HEAVY WEEK

Investor focus this week will be on the monthly reports on US employment and consumer prices that were pushed back slightly due to the recently ended three-day government shutdown.

White House economic adviser Kevin Hassett said on Monday that US job gains could be lower in the coming months due to slower labour force growth and higher productivity. Investors are trying to assess whether weakening in the labour market has tapered off.

“Markets will be squarely focused on a number of key US data releases, including payrolls tomorrow and CPI later,” said CBA’s Kong, adding that the bank sees pressure on the dollar persisting as it is forecasting below-consensus payrolls.

January’s nonfarm payrolls report, out on Wednesday, is expected to show an increase of 70,000 jobs, according to a Reuters poll.

Traders are still pricing in two rate cuts by the Federal Reserve this year, with the first one expected in June, although markets remain on tenterhooks ahead of a potential shift in US policy stance following the nomination of Kevin Warsh to succeed Jerome Powell as Fed chair.

In other currencies, the Australian dollar eased 0.2% to USD 0.7079 while the New Zealand dollar was at USD 0.6045, down 0.2%.

(Reporting by Ankur Banerjee in Singapore and Jiaxing Li in Hong Kong; Editing by Sonali Paul)

 

Gold, silver retreat as dollar ticks up

Gold, silver retreat as dollar ticks up

Feb 10 (Reuters) – Gold and silver fell on Tuesday after two straight sessions of gains, as the dollar edged higher from a more than one-week low, while investors awaited key US jobs and inflation data due later this week to gauge the interest rate trajectory.

FUNDAMENTALS

* Spot gold fell 1% to USD 5,016.56 per ounce by 0055 GMT. The metal gained 2% on Monday, as the dollar weakened to a more than one-week low. It had scaled a record high of USD 5,594.82 per ounce on January 29.

* US gold futures for April delivery lost 0.8% to USD 5,041.60 per ounce.

* Spot silver was down 2.5% at USD 81.31/oz, after rising nearly 7% in the previous session. It had hit an all-time high of USD 121.64 on January 29.

* The US dollar index rose 0.2% from a more than one-week low hit in the previous session, making greenback-priced metals more expensive for overseas buyers.

* Stock indexes rose on Monday, with US technology shares leading Wall Street higher, as investors sought bargains in markets beaten down last week, while the yen strengthened following the resounding election win of Japanese Prime Minister Sanae Takaichi.

* White House economic adviser Kevin Hassett said on Monday that US job gains could be lower in the coming months due to slower labor force growth and higher productivity, weighing into a debate that is also underway at the Federal Reserve and promises to shape the central bank’s coming policy decisions.

* Investors expect at least two 25-basis-point rate cuts in 2026, with the first one expected in June. Non-yielding bullion tends to do well in low-interest-rate environments.

* Investors await the nonfarm payrolls report for January, due on Wednesday, and inflation data on Friday for more cues on the Fed’s monetary policy path.

* Spot platinum shed 1.6% to USD 2,088.71 per ounce, while palladium lost 1.7% to USD 1,710.68.

DATA/EVENTS (GMT)
1330 US Import Prices YY Dec
1330 US Retail Sales MM Dec

 

(Reporting by Ishaan Arora; Editing by Subhranshu Sahu)

 

US IPO proceeds to quadruple to record USD 160 billion in 2026 as dealmaking rebounds, says Goldman

US IPO proceeds to quadruple to record USD 160 billion in 2026 as dealmaking rebounds, says Goldman

US equity markets are set for a sharp rebound in IPOs in 2026, Goldman Sachs analysts said, forecasting proceeds quadrupling to a record USD 160 billion as marquee names such as SpaceX, OpenAI, and Anthropic edge closer to public listings.

The Wall Street brokerage also expects the number of IPOs to double to 120 this year, as improving economic growth, stronger equity prices, and easier financial conditions revive dealmaking appetite.

The forecast marks the biggest year on record in absolute proceeds, the analysts said in a note issued on Friday, adding that IPO value would still only represent a small slice of overall US market capitalization, reflecting the equity market’s growth over the past decade.

Twelve firms have raised about USD 5 billion via IPOs so far in 2026, including AI equipment maker Forgent Power and biopharmaceutical company Eikon Therapeutics. Nvidia-rival AI chipmaker Cerebras Systems, which just raised USD 1 billion in a late-stage funding round that valued it at USD 23 billion, is also in the running.

Software and healthcare firms are set to dominate the IPO pipeline by volume while a handful of late-stage tech and artificial intelligence companies are expected to drive proceeds, according to the note.

At the center of investor attention are a handful of ultra-valuable private companies, including Elon Musk’s SpaceX, artificial intelligence firm Anthropic and ChatGPT maker OpenAI, with their potential public debuts likely defining the scale and tone of the next IPO cycle.

Listings by large private companies will shape the 2026 IPO market, analysts said, with proceeds ranging from roughly USD 80 billion to almost USD 200 billion, compared with a USD 160 billion base case.

However, an early-year selloff in software stocks has underscored valuation risks, the analysts warned, especially as the sector accounts for about a quarter of the IPO backlog.

“Continued volatility in share prices and corporate confidence are the key macro risks to our forecast. The substantial weight of software in the IPO backlog is another risk,” Goldman added.

(Reporting by Rashika Singh in Bengaluru; Editing by Janane Venkatraman)

 

Japan stocks surge to record, bonds slide with yen on Takaichi’s landslide election win

Japan stocks surge to record, bonds slide with yen on Takaichi’s landslide election win

TOKYO – Japanese stocks swept to record peaks while bonds slid and the yen sagged to an all-time low against the Swiss franc after Prime Minister Sanae Takaichi scored a landslide win in Sunday’s snap election.

Takaichi’s Liberal Democratic Party won 316 of the 465 seats in parliament’s lower house, giving her the mandate to push through her big spending plans and promised tax relief without negotiating with other parties. The so-called supermajority also allows the LDP to pass legislation without upper house approval.

The Nikkei 225 share average rallied 5.7% to an unprecedented 57,337.07 by 0146 GMT. Of its 225 components, 197 rose while the rest fell, underscoring the breadth of the upsurge.

The broader Topix jumped as much as 3.4% to a record 3,825.67.

Heavyweight chip-testing equipment maker Advantest, a supplier to Nvidia, vaulted more than 13% to be the Nikkei’s top performer, leading a rally among shares linked to artificial intelligence.

The market “sees greater momentum for Prime Minister Takaichi’s policy agenda,” particularly her fiscal policy, said Shingo Ide, chief equity strategist at NLI Research Institute.

“It’s not just a stable administration – What’s coming into view is the prospect of a long-term administration.”

For the Nikkei though, “I don’t think it will keep rising at this pace. If it were to shoot straight to 60,000, that would be a bit overdone,” Ide said, adding that it may eventually “settle down” around 56,000.

ELECTION MANDATE PUTS SHARP FOCUS ON FISCAL PLAN

Japanese government bond yields rose, with short-term yields reaching a three-decade peak. But the longest-dated bonds, which are most sensitive to fiscal worries, were little changed on the day after erasing an initial spike higher in yield.

Bond yields move inversely to prices.

Two-year JGB yields climbed 2.5 basis points (bps) to the highest since May 1996 at 1.3%, and 10-year yields jumped 4 bps to 2.27%.

Thirty-year JGB yields climbed as much as 6.5 bps to 3.615%, but were last down 0.5 bp at 3.545%.

“I think the reaction indicates that Takaichi has successfully convinced the market that she will be a strong leader, but not be a fiscally irresponsible one,” said Zuhair Khan, a senior portfolio manager at UBP.

“But we will have to wait and see.”

From a policymaking perspective, Takaichi’s big win may be the best result for bond investors, because the LDP won’t need to compromise with opposition parties targeting even deeper tax relief and broader fiscal stimulus.

The 30-year JGB yield surged to a record 3.88% last month when Takaichi initially pledged to suspend the tax on food for two years, but has been well below that for the past two weeks.

The yen also eased in early trading, but rebounded strongly after Japan’s top currency diplomat Atsushi Mimura said the government is “closely watching currency movements with a high sense of urgency” in a warning about potential yen-buying intervention.

From being down as much as 0.3% to reach 203.30 yen per franc for the first time ever on Monday, the Japanese currency reversed direction to be up 0.4% at 201.90.

The yen had declined 0.4% to 186.55 per euro, putting it close to the record low of 186.86 from last month, but was last changing hands at 185.22 per euro, up 0.3%.

It fell 0.5% to as low as 157.95 per US dollar, a two-week trough, before rebounding to be 0.3% stronger at 156.65.

“The market has long been mindful that further yen weakness could invite intervention,” said Kumiko Ishikawa, senior analyst at Sony Financial Group.

After substantial yen declines last week amid expectations of a Takaichi victory, “the topside was already heavy” in the dollar-yen pair, she said. “Then Mimura’s verbal intervention came in and nudged the level lower.”

(Reporting by Kevin Buckland; Editing by Jamie Freed and Shri Navaratnam)

 

Oil drops as US, Iran pledge to continue talks

Oil drops as US, Iran pledge to continue talks

SINGAPORE – Oil prices fell on Monday after the US and Iran pledged to continue talks over the Middle Eastern producer’s nuclear programme, easing concerns about a possible conflict that could disrupt supply from the region.

Brent crude futures fell 49 cents, or 0.72%, to USD 67.56 a barrel by 0134 GMT after settling up 50 cents on Friday.

US West Texas Intermediate crude was at USD 63.13 a barrel, down 42 cents, or 0.66%, following a 26-cent gain at Friday’s settlement.

“Crude oil has eased in early trading this week, with the market breathing a sigh of relief over the constructive US-Iran nuclear talks in Oman,” IG market analyst Tony Sycamore said.

“With more talks on the horizon, the immediate fear of supply disruptions in the Middle East has eased quite a bit.”

Iran and the US pledged to continue the indirect nuclear talks following what both sides described as positive discussions on Friday in Oma,n despite differences. That allayed concerns that failure to reach a deal might nudge the Middle East closer to war as the US has positioned more military forces in the area.

Investors are also worried about possible disruptions to supply from Iran and other regional producers as exports equal to about a fifth of the world’s total oil consumption pass through the Strait of Hormuz between Oman and Iran.

Both benchmarks fell more than 2% last week on the easing tensions, their first decline in seven weeks.

However, Iran’s foreign minister said on Saturday that Tehran will strike US bases in the Middle East if it is attacked by US forces, showing the threat of conflict is still alive.

Investors are also continuing to grapple with efforts to curb Russian income from its oil exports for its war in Ukraine.

The European Commission on Friday proposed a sweeping ban on any services that support Russia’s seaborne crude oil exports.

Refiners in India, once the biggest buyer of Russia’s seaborne crude, are avoiding purchases
for delivery in April and are expected to stay away from such trades for longer, refining and trade sources said, which could help New Delhi seal a trade pact with Washington.

In a sign that rising energy prices are encouraging more production, Baker Hughes reported on Friday that US energy firms last week added oil and natural gas rigs for a third week for the first time since November.

(Reporting by Florence Tan; Editing by Jamie Freed and Christian Schmollinger)

 

US Treasury yields rebound before next week’s key jobs data

US Treasury yields rebound before next week’s key jobs data

NEW YORK – Interest-rate-sensitive two-year US Treasury yields rebounded from a more than three-month low on Friday ahead of January’s highly anticipated jobs report next week that will offer the next clues on the strength of the labor market.

Two economic reports on Thursday pointed to a weakening jobs picture, with jobless claims rising more than economists had expected last week, while job openings fell to a more than five-year low in December.

That prompted a sharp drop in yields as traders increased bets that the Federal Reserve may cut rates more times this year than previously thought.

Next week’s payrolls report may be key to confirming or allaying these fears for the near term.

‘HYPER-FOCUSED’ ON LABOR MARKET

“The market is hyper-focused on anything to do with the labor market currently, just given the fact that that’s why the Fed has been cutting and most likely will be the reason that they cut again if it shows true signs of continued weakness,” said Scott Pike, senior portfolio manager at Income Research + Management in Boston.

“To really get the market to meaningfully change its view on the path forward for the Fed, most likely it’s going to need to come from a surprise in the nonfarm payrolls report,” Pike said.

January’s jobs report, due on Wednesday, was delayed from Friday due to the government’s four-day partial shutdown that ended on Tuesday. It is expected to show that employers added 70,000 jobs in January, according to the median estimate of economists polled by Reuters. The unemployment rate is expected to stay steady at 4.4%.

The two-year note yield, which typically moves in step with Federal Reserve interest rate expectations, was last up 1.5 basis points at 3.498%, after reaching 3.426%, the lowest since October 17.

The yield on benchmark US 10-year notes was flat at 4.21% and dropped to 4.156%, the lowest since January 15.

The yield curve between two-year and 10-year notes flattened to 71 basis points.

Fed funds futures traders are now pricing in 58 basis points of cuts by year’s end, up from around 50 basis points earlier this week, indicating that they see a growing chance of a third 25-basis-point cut this year.

A recovery in the stock market also helped push yields higher on Friday, after a stock selloff boosted demand for safe-haven US government debt on Thursday.

“The volatility that we’ve been seeing in the equity markets and risk markets very recently certainly contributed to the drop in Treasury yields,” Pike said.

Traders are also continuing to evaluate the likely monetary policies of former Fed Governor Kevin Warsh when he takes over as Fed chair after Jerome Powell’s term ends in May.

Warsh had a reputation as an inflation hawk in his earlier stint at the central bank, but now advocates for rates to be lowered.

He has also argued that large Fed holdings distort finances in the economy, and any efforts to reduce the size of the US central bank’s balance sheet would tighten financial conditions.

Bank of America analysts led by Mark Cabana view concerns over Warsh’s balance sheet policies as overdone.

“Warsh is unlikely to be as balance sheet hawkish as funding markets fear,” they said in a report. Warsh is likely to support ample Fed reserves and would find it difficult to shrink the Fed’s balance sheet size without bank liquidity regulation change, they said.

(Reporting by Karen Brettell, Editing by Nick Zieminski, Rod Nickel)

 

Stocks tumble as AI rout deepens, cryptos rebound

Stocks tumble as AI rout deepens, cryptos rebound

SINGAPORE – Global equities extended losses into a third day on Friday as a selloff on Wall Street intensified, with precious metals and cryptocurrencies gripped by wrenching volatility.

MSCI’s broadest index of Asia-Pacific shares outside Japan tumbled 1% to mark a second day of losses, led by a 5% dive for South Korea’s Kospi, which triggered a brief trading halt shortly after the open. S&P 500 e-mini futures slid 0.2% and Nasdaq e-mini futures fell 0.4%.

“Investors are questioning their commitment to the pillars that have underpinned markets over the past six months: AI, crypto, and precious metals,” said Tony Sycamore, market analyst at IG in Sydney. “This raises the odds of a deeper unwind.”

Stocks sold off overnight on fears that new AI models may start to eat into the profits of software firms, with the S&P 500 turning negative for the year as fears around the labour market grew.

Layoffs announced by US employers surged in January to the highest level for the month in 17 years, a survey from global outplacement firm Challenger, Gray & Christmas showed on Thursday.

Precious metals rallied off their lows but were still down for the day, with gold falling 0.1% at USD 4,764.43 and silver plunging as much as 10% before recovering. The white metal was last down 1.4% at USD 70.26.

Cryptocurrency markets reversed losses after breaching several milestones in a USD 2 trillion wipeout on Thursday, with bitcoin surging 3.7% to USD 65,446.07 after earlier falling as much as 4.9% to a low of USD 60,008.52. Ether was last up 4.4% at USD 1,928.12, overturning an earlier 5.1% decline.

The S&P 500 software and services index dropped 4.6%, having shed about USD 1 trillion in market value since January 28, in a selloff dubbed “software-mageddon.”

“You’ve seen a lot of these big crowded positions being unwound very, very aggressively and that’s led to massive flows,” said Chris Weston, head of research at Pepperstone Group in Melbourne. “We’re getting to a stage where we could see, later this year, casualties,” he added.

“Certain businesses – not the Mag7 – but for some of the smaller businesses, the capital markets may not be so kind,” he said, referring to the so-called Magnificent Seven mega-cap technology stocks.

Amazon shares tumbled 11.5% in after-hours trading on Thursday after it projected a surge of more than 50% in capital expenditures this year.

The market is starting to bet on an increased likelihood of policy easing by the Federal Reserve at its next meeting, though most still expect it to remain on hold.

Fed funds futures are pricing a 22.7% probability of a 25-basis-point cut at the US central bank’s next two-day meeting that ends on March 18, compared with a 9.4% chance a day earlier, according to the CME Group’s FedWatch tool.

The US dollar index, which measures the greenback’s strength against a basket of six currencies, was recently flat at 97.92. The yield on the US 10-year Treasury bond was last down 2.8 basis points at 4.18%.

The yen rallied 0.3% to 156.58 against the dollar, and Japanese government bonds attracted buyers across the curve ahead of Sunday’s election.

In energy markets, Brent crude was last down 0.4% at USD 67.31.

(Reporting by Gregor Stuart Hunter and Tom Westbrook; Editing by Shri Navaratnam and Thomas Derpinghaus)

 

Dollar set for strongest week since November, yen steadies before polls

Dollar set for strongest week since November, yen steadies before polls

SINGAPORE – The US dollar steadied near a two-week high on Friday, poised for its strongest weekly performance since November as a rout in stocks driven by AI-spending concerns rattled investors, while the yen firmed ahead of a national election on Sunday.

The dollar has strengthened since President Donald Trump nominated Kevin Warsh as the next Federal Reserve Chair last week as markets expect him not to push a lot for rate cuts, easing some worries about central bank independence.

The sharp selloff in technology stocks this week comes as investors fret about the massive spending on artificial intelligence as well as the cascading impact of fast-advancing AI tools that could upend various sectors.

The risk aversion has helped the dollar despite US Treasury yields sliding after economic data pointed to a weaker-than-expected jobs market ahead of next week’s highly anticipated payrolls report for January.

The dollar index, which measures the US currency against six other units, was at 97.961, hovering near the highest since January 23. The index is set for a 1% increase for the week, its steepest rise since the middle of November.

ING economists said an apparent slowdown in hiring suggests the Fed may have acted a little prematurely in downplaying the risks to the jobs aspect of its mandate at its January policy meeting.

“Major downward revisions to payrolls next week would add to the pressure to eventually resume rate cuts,” they said in a note. Traders are still pricing in two cuts for the year, but the possibility of a move in June has inched up.

The euro was at USD 1.1784 after the European Central Bank left interest rates on hold as expected on Thursday and played down the impact of dollar moves on its future decisions.

Sterling was nursing steep losses in early Asian hours and stood at USD 1.3520 after dropping nearly 1% in the previous session.

The Bank of England kept interest rates on hold on Thursday, but only after an unexpectedly narrow 5-4 vote, and said borrowing costs are likely to fall if an expected drop soon in inflation is sustained.

The yen JPY= was a shade stronger in early trading at 156.74 ahead of a national election over the weekend, where a victory for Prime Minister Sanae Takaichi could be on the cards.

The vote has investors on edge because fiscal worries have sparked a stomach-churning selloff in the currency and bond markets, and a further leg lower would likely reverberate globally.

“An outsized victory will reduce near-term constraints on Takaichi’s fiscal policy goals, including reducing the consumption tax,” said Samara Hammoud, a currency strategist at CBA.

“Importantly, it still remains unclear how Takaichi plans to pay for expansionary fiscal policy. Renewed concerns about Japan’s burgeoning government debt will weigh on Japanese government bonds and the JPY.”

Gold and silver, which have become more volatile as a result of leveraged buying and speculative flows, have been rocked by steep selloffs this week. Silver was down 3% in early trading, on course for an 18% decline for the week.

In the crypto market, Bitcoin was choppy after hitting its lowest since October 2024. It was last at USD 63,273 after dropping to as low as USD 60,017.

(Reporting by Ankur Banerjee in Singapore; Editing by Jacqueline Wong)

 

Oil extends decline ahead of US-Iran talks

Oil extends decline ahead of US-Iran talks

SINGAPORE – US crude futures extended their decline on Friday, on track for their first weekly drop in weeks, as concerns about supply disruption in the Middle East eased with investors focusing on the outcome of US-Iran nuclear talks in Oman later in the day.

Brent crude futures dropped 50 cents, or 0.74%, to USD 67.05 a barrel at 0102 GMT after settling 2.75% lower in the previous session.

US West Texas Intermediate crude was at USD 62.77 a barrel, down 52 cents or 0.82%, after closing 2.84% lower on Thursday.

The benchmarks are headed for their first weekly drop in more than a month and are down more than 3% from near six-month highs reached in late January when US President Donald Trump threatened to strike Iran.

Both countries agreed to hold talks in Oman on Friday amid heightened tensions as the US builds up forces in the Middle East and regional players seek to avoid a military confrontation that many fear could escalate into a wider war.

About a fifth of the world’s total oil consumption passes through the Strait of Hormuz between Oman and Iran. Other OPEC members, Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq, export most of their crude via the strait, as does Iran.

“Escalating geopolitical tensions between the US and Iran have contributed to higher oil prices,” Capital Economics analysts said in a note.

“But we think that geopolitical fears will give way to weak fundamentals,” they said, pointing to a recovery in Kazakhstan’s oil output, which will help push oil prices lower towards USD 50 per barrel by end-2026.

(Reporting by Florence Tan; Editing by Chris Reese and Thomas Derpinghaus)

 

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