Oil prices climbed to their highest level in five months on Friday as escalating fighting in the Middle East deepened fears over global crude supplies, while a selloff in technology shares spread across Asian markets. The moves, reported by Bloomberg and Reuters, underscore how the conflict around the Gulf and the Red Sea is now rattling both energy markets and the broader financial system.
Brent crude, the global benchmark, rose 0.4% to $113.65 a barrel on Friday, extending Thursday’s 4% jump that had already carried prices to a five-month high, according to Bloomberg’s markets coverage. US benchmark West Texas Intermediate also pushed higher, trading around $98–$99.80 and crossing above $100 — $100.05 on the NYMEX, according to APA — as traders priced in the risk of further supply disruption.
Why Oil Is Rallying: Supply Fears From Saudi Arabia to Libya
The rally is being driven by mounting concern that the fighting between Saudi Arabia and Yemen-based Houthi forces could hit crude supplies and the sea lanes that carry them. According to Reuters, Saudi Aramco ordered the evacuation of its Dhahran headquarters on Thursday as fighting intensified between Saudi Arabia and the Houthis. The Houthis, who are aligned with Iran, have been advancing toward Bab el-Mandeb, the strategic chokepoint at the mouth of the Red Sea, Reuters reported — a development with direct implications for tanker traffic between the Gulf and Europe.
Libya added a second front to the supply worries. The head of Libya’s National Oil Corporation told Reuters on Thursday that a pipeline valve running from the Hamada and Tahara oilfields to the port of Zawiya had been shut, reducing production at both fields. With two supply threats hitting the headlines in a single week, crude markets moved sharply: Thursday’s 4% surge in Brent was followed by Friday’s further advance to the five-month peak.
The developments around the Strait of Hormuz added to the anxiety. Britain’s Foreign Office said this week that passage through the strait “remains under threat, with traffic through the waterway sharply down on pre-war levels” — and Hormuz carries roughly a fifth of the world’s oil consumption. When the world’s most important oil chokepoint is described by a major government as under threat, traders tend to add a risk premium, and that is what has happened this week.
Analysts quoted by market outlets noted that the price action reflects fear of what might happen next rather than actual barrels lost so far. Saudi Arabia remains the world’s largest crude exporter, and any sustained threat to its production or to the Red Sea and Gulf shipping lanes would force buyers to scramble for alternative supplies. The evacuation order at Aramco’s Dhahran headquarters — reported by Reuters — was enough to sharpen those fears, even though the company has not reported damage to production facilities.
Tech Stocks Extend Their Slide Across Asia
While oil surged, technology shares moved in the opposite direction. The global tech selloff deepened on Friday: South Korea’s Kospi fell about 1.5%, on course for its worst close since April, as Samsung and SoftBank retreated, according to Bloomberg’s Asia markets coverage. MSCI’s gauge of Asia Pacific stocks hit its lowest close since late July.
Investors rotated into safer assets. Treasuries staged their biggest rally in more than two years on Thursday, with the US 10-year yield falling 17 basis points to 4.96%, and the yen held around 156.90 per dollar — classic signs of money seeking shelter from geopolitical risk. The combination of surging oil and sliding tech shares is a painful one for markets: higher energy costs threaten to stoke inflation just as growth-sensitive technology stocks are already under pressure.
The selloff in Asian tech names follows a broader pattern seen in recent weeks, as investors have grown wary of stretched valuations in artificial intelligence-related stocks. But Friday’s moves had a clear geopolitical trigger: when oil jumps on war fears, the risk-off trade tends to hit growth stocks first and hardest.
Background: A Week of Escalating Pressure
The market turmoil caps a week in which the Middle East conflict has repeatedly spilled into financial headlines. Thursday’s 4% leap in Brent was the market’s first violent reaction to the intensifying Saudi-Houthi fighting; Friday’s extension of the rally to $113.65 confirmed that traders see the risk as ongoing rather than one-off.
Diplomacy is attempting to catch up. On the same day oil hit its five-month high, foreign ministers from Europe and the Middle East were meeting in Istanbul in the first joint R4-E3 session — with the Strait of Hormuz, Yemen, the Palestinian issue and the Ukraine war on the agenda. Britain’s foreign secretary was expected to advocate a diplomatic solution restoring full navigational rights through Hormuz, while Turkey was expected to stress permanent freedom of navigation in the Hormuz and Bab el-Mandeb straits.
For energy markets, the question is whether diplomacy can calm the shipping lanes before actual supply is lost. For equity markets, the question is whether the tech selloff is a brief risk-off episode or the start of something deeper.
What to Watch Next Week
Two sets of events will test the market mood in the coming days. First, earnings from three of the world’s biggest technology companies — Microsoft, Amazon and Alphabet — will show whether the sector’s fundamentals can steady nerves after the selloff. Second, the US Federal Reserve’s policy decision will signal how the central bank views the twin pressures of rising energy costs and jittery markets.
If the fighting around Saudi Arabia and the Red Sea escalates further, or if Hormuz traffic deteriorates, oil could push higher still — and the risk-off trade could deepen. If diplomacy in Istanbul and beyond gains traction, some of this week’s risk premium could unwind just as quickly. The situation is still developing, and markets will be watching the Middle East as closely as the earnings calendar.
