Crude oil held most of a surge that at one point took prices above $115 a barrel as the US and Iran exchanged fire, jolting a four-week-old ceasefire and raising concerns that Middle East tensions could escalate again.Brent edged 0.5% lower to just under $114 a barrel at the open Tuesday as escalating tensions around the Strait of Hormuz raised fears about high energy prices and global inflation. Australian shares opened lower, with markets closed in Japan, South Korea and mainland China. US equity-index futures were little changed after the S&P 500 Index retreated from its record on Monday.During the US session, Treasuries fell, sending 30-year yields to the highest since July, as traders boosted wagers that the Federal Reserve will have to reverse course and raise interest rates to curb inflation following a surge in oil prices. There will be no cash trading during Asian hours due to the holiday in Japan.Renewed tensions threaten to inject fresh volatility into markets after a month-long rally that helped global equities erase war-related losses and climb to record highs on strong earnings from megacap technology companies. Investors remain focused on the Strait of Hormuz, a key waterway that has been blocked for months, keeping energy prices elevated and risking higher inflation and slower economic growth.“Even if the immediate conflict de-escalates, we expect the aftershocks will remain with us for some time,” said Darrell Cronk at Wells Fargo Investment Institute. “The effects — on energy prices, industrial activity, and geopolitical risk premia — are unlikely to fade quickly.”The US fought off Iran’s attacks as it facilitated the passage of two vessels through the Strait of Hormuz. Meantime, the UAE blamed an Iranian drone strike for a fire at its Fujairah port and issued several missile alerts for the first time since a truce between Washington and Tehran took hold.
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