HONG KONG: Brent crude hit its highest price since June on Monday (Jul 20) due to renewed fighting between the United States and Iran, while Asian equities were mixed as investors weighed the fallout of a prolonged Middle East war.

Crude has surged over the past week as Washington and Tehran traded fire, raising fears of a sustained disruption in the Strait of Hormuz, which normally carries around a fifth of the world's seaborne oil.

Both Brent crude and US benchmark West Texas Intermediate extended their gains after climbing more than 4 per cent at the end of last week. Brent rose above US$91 a barrel, its highest price since Jun 11.

The latest moves came after another weekend of escalating fighting, with the United States carrying out fresh strikes on Iranian targets and Tehran responding with attacks on regional military assets in the Gulf.

Higher crude prices have revived concerns that inflation could remain elevated and complicate the path to lower interest rates, but some analysts argue the broader economic backdrop is becoming more supportive.

"Markets are once again being forced to trade two seemingly contradictory stories on the same screen," said Stephen Innes of SPI Asset Management.

While the renewed rise in oil prices has injected a fresh geopolitical risk premium into markets, he said cooling underlying US inflation and a softer labour market suggested the energy shock would not necessarily trigger a new cycle of broad-based inflation.

Instead, the biggest risk would come if elevated oil prices persist long enough to erode household spending and weigh on economic growth.

In Asia, the market was mixed.

Chinese markets outperformed as investors extended a recent rally on expectations Beijing will unveil further measures to support the economy after last week's economic data.

Hong Kong added more than 2 per cent, while Shanghai ended the day's trade in the green. Manila and Jakarta edged higher.

Caution prevailed elsewhere.

Seoul closed 4.46 per cent down. Taipei was down, as was Sydney, Mumbai, Bangkok, Singapore and Kuala Lumpur.

London, Paris and Frankfurt also opened in the red.

The mellow performance followed another weak session on Wall Street, where all three major indexes finished lower on Friday as investors continued to rotate out of technology shares while keeping a close watch on developments in the Gulf.

Adding to worries about tech, Chinese startup Moonshot AI released on Friday a model that experts said could rival some of the more advanced offerings from US labs.

"Having had the weekend to digest the launch of Moonshot's Kimi K3 model and its potential implications for the pricing power of the major US AI labs ... markets appear to be taking a more measured view," said Chris Weston, head of research at Pepperstone.

Gold eased despite the geopolitical uncertainty, falling 0.25 per cent, while silver advanced a little over 1 per cent.