Oil prices extended a surge on Wednesday as the Middle East crisis burst back into the spotlight with US forces launching fresh strikes on Iran after an attack on three vessels in the Strait of Hormuz.

The sudden flare-up has stoked concerns about peace talks between the foes as they look to end their conflict and fully reopen the crucial waterway.

It added to the dour mood on trading floors amid a fresh tech sell-off caused by questions over stretched valuations and when companies will start realising profits from the eye-watering sums pumped into the AI sector in recent years.

US Central Command said the “powerful” strikes on Iran were in response to attacks on ships transiting the strait and would “impose heavy costs for targeting and attacking commercial shipping”.

Three vessels were struck close to Oman, which had proposed a temporary transit corridor hugging its coastline — an initiative opposed by Tehran as it seeks to impose fees on ships using the waterway.

Iran’s foreign ministry accused the United States of repeatedly violating a memorandum of understanding agreed between the two sides, and threatened to “take decisive measures to protect its interests and national security”.

The strikes came shortly after Washington revoked a temporary sanctions waiver for Iranian oil.

Both main crude contracts jumped more than two% Wednesday — having climbed a similar amount Tuesday — to hit their highest levels in two weeks. Andreas Krieg, a security expert at King’s College London, said Iran was determined to stick to its demand of charging fees to use the strait, which Washington has said was not acceptable.

“We are now in a sensitive period where potential alternatives to an Iranian toll or fee system are being explored,” he told AFP.

“Iran is sending a clear signal that no alternative will be accepted.”

Equities also suffered, with the fresh US-Iran tensions coming on top of a retreat from the tech sector that has powered markets to multiple record highs over the past two years.

Seoul’s Kospi — which has been Asia’s poster boy for the rally — sank more than one% and has lost more than 20% since hitting a record high last month.

Samsung again took a hit following a rout Tuesday that came despite forecasting its operating profit had rocketed more than 1,800% in the second quarter on the back of strong AI chip demand.

There were also losses in Tokyo, Shanghai, Sydney, Singapore, Wellington and Taipei. However, Hong Kong rose more than one%.

“After AI and tech sentiment had dominated market moves over the last couple of weeks, investors are now forced to move back to focusing on geopolitical tensions,” AT Global Markets’ Nick Twidale said.

“And this should dominate market sentiment, especially if we see a further escalation in the coming sessions.”

The dollar extended gains against its peers as the prospect of another hit to supplies from the Middle East fuelled concerns that inflation could remain elevated for longer than feared, putting pressure on the Federal Reserve to hike interest rates.