Iran and the United States engaged in mutual retaliatory attacks after Iran struck vessels transiting the Strait of Hormuz, reigniting Middle East tensions and causing international oil prices to surge again on May 8. WTI crude oil exceeded $76 per barrel and the US 10-year Treasury yield approached 4.6%. Rising oil prices triggered inflation concerns, pushing US Treasury yields higher and escalating tension in global financial markets, though analysts view the conflict as negotiation tactics rather than a path to full-scale war.
Oil Prices Reach Multi-Week Highs as Treasury Yields Spike
According to the financial investment industry on May 9, WTI (West Texas Intermediate) crude oil prices rose to $76.08 per barrel on May 8 (local time), recording the highest level since April 22. Brent crude also surged during trading to $80.59, exceeding $80 for the first time since April 22. On May 7, Iran attacked three energy transport vessels passing through the Strait of Hormuz, and the United States immediately revoked licenses for Iranian crude oil and petroleum product sales before striking Iran, raising geopolitical risks.
The market interprets this situation as a negotiation process involving psychological warfare rather than a breakdown such as suspension of talks between the two countries. Oil prices are declining again, but analysts expect such discord to continue until the conflict ends.
As international oil prices fluctuated, US Treasury yields and global foreign exchange markets also moved. The US 10-year Treasury yield reached a high of 4.598% on May 8, recording the highest level since May 21. The dollar index also exceeded 100.
Analysts Interpret Conflict as Negotiation Tactics
Global stock markets and financial markets are not significantly affected, viewing the collision between the two countries as noise in the negotiation process.
In the case of the domestic stock market, concerns about the semiconductor industry appear to have had a relatively large impact. US President Donald Trump emphasized after strong remarks against Iran that "no matter what happens, it will end very quickly" and appeared to manage the situation by saying "the oil market is the same. Oil supply will be very smooth. It will be easily supplied."
Park Sang-hyun, researcher at iM Securities, diagnosed that "there is a strong aspect that this incident is interpreted as a psychological war between the two countries to gain the initiative in negotiations rather than breaking the negotiations, so the financial market does not take it seriously," while adding that interest rate movements need to be monitored.
He said, "The US 10-year Treasury yield surged, showing a sensitive reaction as concerns were reflected that the oil price surge could raise inflationary pressure again," and "if interest rates rise further, it will act as a burden as it can adversely affect not only the stock and foreign exchange markets but also other asset markets."
Investment Strategists Recommend Focus on Semiconductors Over Geopolitics
Some point out that it is appropriate to focus on issues surrounding the semiconductor and AI (artificial intelligence) industries rather than geopolitical uncertainty.
Han Ji-young, researcher at Kiwoom Securities, said "with the rebound of the US stock market and the return of WTI gains, it can be said that the stock market's resistance to geopolitical uncertainty has not been significantly damaged," and advised a strategy of split buying centered on existing major industries with large declines.
FAQ
What caused oil prices to surge on May 8?
On May 7, Iran attacked three energy transport vessels passing through the Strait of Hormuz. The United States immediately revoked licenses for Iranian crude oil and petroleum product sales and retaliated by striking Iran. These events caused WTI crude oil to reach $76.08 per barrel on May 8, the highest level since April 22.
How did financial markets react to the US-Iran conflict?
The US 10-year Treasury yield reached 4.598% on May 8, the highest since May 21, reflecting inflation concerns from rising oil prices. The dollar index exceeded 100. However, global stock markets did not show significant impact, with analysts interpreting the tensions as negotiation tactics rather than escalation to full conflict.
What investment strategy do analysts recommend during this period?
Kiwoom Securities researcher Han Ji-young advised a strategy of split buying centered on existing major industries with large declines, particularly focusing on semiconductor and AI industry developments rather than geopolitical uncertainty. Analysts noted that the stock market's resistance to geopolitical risks remained intact.
