Tariff Uncertainty Weighs on Risk Assets as Oil Surges on Middle East Supply Concerns

Geopolitical tensions in the Middle East are driving crude prices higher, with Brent crude climbing toward $108 as attacks on Saudi infrastructure and disruptions to critical shipping routes tighten global supply. Pipeline shutdowns and reduced traffic through the Strait of Hormuz have rattled energy markets, while refiners across Asia scramble to assess the impact on their operations. Energy companies are signaling that elevated liquefied natural gas prices will persist in the near term, adding to inflationary pressures.

Meanwhile, risk appetite has soured as trade policy uncertainty takes center stage. Threats of additional tariffs on major trading partners have triggered selloffs across equities and cryptocurrencies, with Bitcoin slipping below $95,000 as investors reassess their exposure to riskier assets. Stock markets in Asia declined sharply following tariff announcements, though some forecasters remain bullish on longer-term equity valuations despite describing the macro outlook as murky.

The divergence reflects a market caught between competing forces: traditional safe havens like oil are benefiting from supply-side disruptions, while growth-sensitive assets face headwinds from policy uncertainty and a stronger dollar anchored by elevated Treasury yields. Crypto markets, which tend to move with broader risk sentiment, have borne the brunt of the recent shift toward caution.