Oil surges 20% as Hormuz blockade persists, Alphabet braces earnings
Oil prices jumped about 20% over the past week as the Strait of Hormuz remains closed by Iran and a US blockade persists, fueling market caution ahead of Alphabet’s upcoming earnings. Asian equity markets fell while Wall Street giants including Alphabet brace for next week’s results, heightening risk aversion.
1. Middle East tensions drive crude gains
Iran’s decision not to reopen the Strait of Hormuz, coupled with a continued US naval blockade, sent Brent and WTI crude prices up by more than 20% over the week. Both main contracts climbed over 1% on Friday following a 3% rise the previous session, reflecting heightened supply concerns.
2. Equity markets retreat
Major Asian markets including Hong Kong, Shanghai, Seoul and Sydney posted declines as traders adopted a cautious stance ahead of the weekend and the start of a busy earnings season. Tokyo, Taipei and Manila saw modest gains but overall sentiment remained subdued.
3. Alphabet earnings loom
With Alphabet set to report next week alongside other tech giants, investors are weighing elevated energy costs and geopolitical risks against growth projections. The upcoming results will be closely watched for guidance on ad revenue and cloud services performance.
4. Implications for tech stocks
Rising oil prices can increase operational expenses for data centers and cloud infrastructure, potentially squeezing margins for companies like Alphabet. Heightened market risk aversion may also temper ad spending by clients, posing a near-term challenge for digital advertising revenues.