Global oil prices surged past the $100-a-barrel mark on Monday while stock markets across Asia fell sharply as the escalating conflict involving the United States, Israel and Iran triggered concerns about a prolonged disruption to energy shipments through the Strait of Hormuz.
Benchmark Brent crude climbed nearly 18% in early Asian trading to around $109.25 per barrel, while West Texas Intermediate rose by more than 20% to about $109.37.
The surge came after a weekend of intensified airstrikes across Iran by the United States and Israel, including attacks on energy infrastructure such as oil depots. The escalation has raised fears that the conflict could severely disrupt global energy supplies.
Roughly one-fifth of the world’s oil shipments normally pass through the Strait of Hormuz, one of the most critical chokepoints for global energy trade. However, shipping traffic through the narrow passage has largely stalled since the war began about a week ago.
Asian stock markets tumble amid energy shock
Financial markets reacted sharply to the spike in oil prices and growing geopolitical uncertainty.
Japan’s Nikkei 225 dropped more than 5% in early trading, while South Korea’s Kospi fell by over 6%. Australia’s S&P/ASX 200 also slid nearly 4%.
Market analysts had expected oil prices to approach the $100 mark amid tensions in the region, but the rapid surge surprised traders. Prices reportedly jumped by around 10% within minutes of the market opening in Asia and continued climbing shortly afterwards.
Economists say the biggest concern now is how long the disruption in the Strait of Hormuz will last. Some analysts warn that if the shipping route remains closed until the end of March, oil prices could climb above $150 per barrel.
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Analysts warn of wider economic impact
According to Adnan Mazarei of the Peterson Institute for International Economics, the surge in oil prices reflects growing expectations that the conflict could drag on.
“People are realising that this won’t end quickly,” Mazarei said, adding that disruptions to production in several Gulf countries have already tightened supply.
Rising crude prices could also drive up the cost of derivative products such as jet fuel and fertiliser inputs, increasing pressure on global industries and consumers.
Much of the oil shipped from the Gulf region is consumed in Asia, where demand remains high. Early signs already suggest Asian buyers are bidding up prices for US natural gas shipments, with some tankers reportedly changing course mid-voyage.
Trump responds to oil price surge
US President Donald Trump addressed the sharp rise in oil prices, describing the increase as a necessary consequence of confronting Iran.
Speaking about the surge, Trump said short-term price rises were a “small price to pay” if they helped eliminate what he described as Iran’s nuclear threat.
His energy secretary also told US media that Israel, rather than the United States, was responsible for targeting Iran’s energy infrastructure during the latest strikes.
