Oil jumps, Asian shares mixed after US leaves Iran deal

FILE - This April 5, 2018 file photo shows a building's address on Wall Street, in New York. Stocks are opening slightly lower on Wall Street, Tuesday, May 8, 2018, as the market gives back some of the gains it made the day before. (AP Photo/Richard Drew)

SEOUL, South Korea — Oil prices surged while Asian stock markets traded mixed after President Donald Trump announced the United States will withdraw from a 2015 nuclear accord with Iran and re-impose sanctions. Resulting rising oil prices would have a mixed impact across the region, driving prices higher for some countries that rely heavily on imports, such as Japan, while boosting revenues for exporters such as Indonesia.

KEEPING SCORE: Japan's Nikkei 225 dropped 0.4 percent to 22,412.96 and South Korea's Kospi retreated 0.1 percent to 2,447.02. Hong Kong's Hang Seng index added 0.5 percent to 30,552.57 while the Shanghai Composite Index dipped 0.1 percent to 3,159.22. Australia's S&P/ASX 200 was unchanged at 6,092.60. Stocks rose in Taiwan and Thailand but fell in Singapore and Indonesia, they were lower.

IRAN DEAL: The U.S. decision to leave the Iran nuclear deal, which required Iran to curb its nuclear enrichment program in exchange for relief from international sanctions, will be followed by a restoration of harsh sanctions aimed at limiting Iran's ability to sell oil or conduct other overseas business. Now Iran, the world's fifth-largest oil producer, will have to decide whether to follow the U.S. and withdraw or try to salvage what's left with the European countries.

ANALYST'S TAKE: "Geopolitical risks are heightened especially if Iran retaliates, but it could wait and see if the deal is completely undone or if there is scope for it to continue without the U.S.," Mizuho Bank said in a daily commentary. With Germany, France and Britain saying they are committed to the accord, the European countries will "continue importing oil from Iran, albeit having to side-step the U.S. banking system for trade purposes," it said.

OIL: Prices of oil fell sharply before Trump's announcement but rebounded, with benchmark U.S. crude oil jumping $1.58 to $70.64 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.67, or 2.4 percent, to $69.06 per barrel on Tuesday. Brent crude, which is used to price international oils, gained $1.85 to $76.70 per barrel in London. It lost $1.32, or 1.7 percent, to close at $74.85 per barrel on Tuesday.

WALL STREET: Amid uncertainty over Iran, U.S. stocks finished flat on Tuesday. The S&P 500 index dipped 0.03 percent to 2,671.92. The Dow Jones industrial average gained 0.01 percent to 24,360.21. The Nasdaq was flat at 7,266.90.

CURRENCIES: The dollar rose to 109.47 yen from 109.13 yen while the euro fell to $1.1857 from $1.1864.

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