Global oil prices fell sharply on Tuesday as renewed optimism over possible diplomatic talks between the United States and Iran eased concerns about supply disruptions, even as a broad sell-off in technology stocks weighed on Asian markets.
Brent crude declined 2.6% to $86.08 per barrel, extending losses after surging above $100 last week. West Texas Intermediate (WTI) also dropped to around $81 per barrel.
The decline followed comments by Donald Trump, who said Washington was holding talks with Tehran, raising hopes of a resolution to tensions involving the United States, Israel and Iran.
The lower oil prices helped support European markets, while Asian stocks came under heavy pressure due to renewed concerns about the future of artificial intelligence-related investments.
Technology shares led the decline after reports suggested China’s Shanghai Yuliangsheng had begun mass production of a chipmaking technology previously dominated by Dutch semiconductor equipment manufacturer ASML.
The report triggered fresh concerns over growing competition in the semiconductor industry, prompting investors to reassess the outlook for AI-driven companies.
South Korea’s Kospi index plunged nearly 11%, with chipmakers suffering steep losses. SK hynix fell 14.7%, while Samsung Electronics lost more than 13%.
Japan’s Nikkei 225 also dropped 4% as shares of Kioxia, Advantest and Tokyo Electron declined sharply. In Taiwan, the market fell more than 4%, weighed down by losses in Taiwan Semiconductor Manufacturing Company (TSMC).
Investors are now awaiting quarterly earnings from SK hynix, Samsung, Kioxia and major U.S. technology companies, including Microsoft, Meta, Apple and Amazon.
European markets remained resilient despite the weakness in Asia.
London’s FTSE 100, Paris’ CAC 40 and Frankfurt’s DAX all traded higher, supported by stronger corporate earnings and falling energy prices.
Consumer goods company Unilever climbed 7% after raising its full-year outlook, while Barclays slipped 5% after investors reacted negatively to its updated income guidance.
Market sentiment also improved after reports indicated that Oman and Iran were working toward an agreement to restore shipping through the Strait of Hormuz, a vital route that handles about one-fifth of global oil and liquefied natural gas shipments.
The prospect of renewed diplomacy helped ease fears of supply disruptions and pushed both major oil benchmarks lower.
