Asia energy stocks rise as oil rebounds on renewed Iran supply fears

Asian energy stocks experienced a rise on Thursday, driven by a sharp rebound in oil prices following renewed tensions between the U.S. and Iran. Companies such as CNOOC, Santos, and Woodside Energy saw their shares increase by 2.1%, 1.4%, and 1% respectively. Meanwhile, Eneos in Japan climbed 0.3%, while Inpex saw a decline of 1.3%.

The S&P 500, despite the energy gains, fell by 0.8% on Wednesday, with the Nasdaq dropping 1.1% and the Dow losing 0.7%. This contrasted with the S&P 500 energy sector, which gained approximately 1% as crude prices rebounded. Brent crude prices rose by 3.9% to $103.08 a barrel, while West Texas Intermediate increased by 1.8% to $92.16, marking an end to a series of losses.

The resurgence in oil prices followed Iranian President Masoud Pezeshkian's assertion that Tehran would not yield to U.S. pressure, following President Donald Trump's threat against Iran. This development occurred as U.S. business activity surged to its strongest level in over five years in September, leading to higher Treasury yields and increasing the likelihood of the Federal Reserve raising interest rates at their October meeting.

The 10-year Treasury yield reached its highest level since 2007, further exerting pressure on the broader stock market. Saudi Arabia has been working to restore its East-West pipeline following drone attacks that disrupted the route, while diplomatic efforts between the U.S. and Iran remain ongoing. The pipeline is crucial as it offers Saudi Arabia a route to transport crude to the Red Sea, circumventing the Strait of Hormuz.