Global financial markets registered significant advances today, with oil prices climbing sharply as the ongoing Iran war continued to generate substantial profits for capital. Brent crude, the international standard, gained 2.3% to $104.97 a barrel, a stark increase from approximately $70 per barrel before the war began in late February.
Benchmark U.S. crude also traded 1.8% higher at $98.10 a barrel, directly reflecting the continued disruptions around the Strait of Hormuz, a critical waterway for oil and gas transit, where shipping activities remain well below pre-war levels.
These elevated energy prices coincided with broad gains across Asian equities, including Tokyo’s Nikkei 225 rising 2.7% to 63,339.07, South Korea’s Kospi gaining 0.4% to 7,847.71, and Hong Kong’s Hang Seng picking up 0.9% to 25,612.40.
The Shanghai Composite index climbed 0.9% to 4,112.90, Australia’s S&P/ASX 200 gained 0.4% to 8,657.00, Taiwan’s Taiex closed 2.2% higher, and India’s Sensex rose 0.6%.
On Wall Street, the benchmark S&P 500 added 0.2% yesterday to 7,445.72, the Dow Jones Industrial Average climbed 0.6% to 50,285.66, and the technology-heavy Nasdaq composite edged up 0.1% to 26,293.10, further demonstrating the system's capacity for surplus extraction even amidst geopolitical instability.
Specific corporations also saw significant surges, with Ralph Lauren surging 13.9% following stronger-than-expected quarterly results. Southwest Airlines gained 2.7% and American Airlines climbed 4.9% as oil prices experienced a temporary easing before rebounding.
War Fuels Capital Accumulation
ING commodities strategists Warren Patterson and Ewa Manthey noted today that "Markets are still searching for signs of progress in a potential deal between the US and Iran," adding, "While there are signs of optimism, uncertainty reigns." This uncertainty, however, has proven highly profitable for energy and financial sectors.
Shares of Nvidia fell 1.8% despite better-than-expected quarterly results on the artificial intelligence frenzy, though some analysts believed its share price remained undervalued.
The yield on the U.S. 10-year Treasury was at 4.57%, down from more than 4.67% earlier this week, a period when higher global inflationary pressures stemming from the war fueled a surge in bond yields, indicating a shifting landscape for financial speculation.
The State Protects War Profits
The U.S. Congress, meanwhile, actively worked to preserve the conditions for continued conflict and its associated profits. Republicans delayed into June planned votes on dismissing legislation that would compel President Donald Trump to withdraw from the war.
The House had scheduled a Thursday vote on a war powers resolution brought by Democrats, intended to rein in Trump’s military campaign.
However, GOP leaders declined to hold a vote on the resolution after it became clear they would not have the numbers to defeat the bill, effectively ensuring the continuation of military action that underpins the current market conditions.
This legislative inaction demonstrates the state's primary function in protecting accumulated wealth and suppressing challenges to the existing distribution of power, even when those challenges come from within the political establishment.
Workers Bear the Cost
While capital reaped gains, the working class continued to face the burden of the war's economic fallout. A report showed inflation hitting a four-year low in April, at 1.4%, yet this figure was recorded despite higher prices for oil and gas directly attributable to the war.
This indicates that while overall inflation may appear contained, the cost of essential energy resources, disproportionately affecting working-class households, remains elevated due to the conflict, representing a form of wage suppression through increased living costs.
Furthermore, shipping activities through the Strait of Hormuz remain well below levels seen before the Iran war began in late February, signaling ongoing disruption to global supply chains and economic stability that impacts workers and consumers alike.