Asian markets plunged and crude oil prices surged to dizzying heights on Monday as the U.S.-Israel conflict with Iran dragged into its fifth week, stoking widespread fears of prolonged energy supply chaos.
Brent crude futures leaped more than 3% in overnight trading, pushing past $115 per barrel before easing to about $113—on course for the biggest monthly gain in history, Bloomberg data shows. Tokyo’s Nikkei 225 tumbled 2.8%, with Seoul’s Kospi closing nearly 3% lower, as jittery investors dumped shares for safer bets like gold amid Reuters-reported geopolitical jitters.
Weekend strikes by Iran-backed Houthi rebels in Yemen on Israel sharpened the crisis, alongside Tehran’s pledges to hit U.S. and Israeli officials’ homes and universities. Some 3,500 extra U.S. troops arrived in the region, per Pentagon updates, while Iran’s parliament speaker declared his forces were “waiting for American soldiers.”
President Donald Trump mused in a Sunday Financial Times interview about seizing Iran’s oil outright, including the vital Kharg Island hub that channels over 90% of its exports according to EIA stats.
“I don’t think they have any defence. We could take it very easily,” he said, drawing parallels to the U.S. grip on Venezuela’s oil post-Nicolás Maduro’s January fall.
Tehran’s reprisals have choked the Strait of Hormuz—lifeline for one-fifth of global oil and gas—bringing flows to a near halt in a scenario worse than 2019 tanker woes, says Clingendael Institute analysis. Shipping expert Lars Jensen, ex-Maersk and Vespucci Maritime founder, predicts lasting pain.
“We need to keep in mind that a lot of the oil that was loaded in the Persian gulf prior to this crisis is only now arriving in refineries,” he told the BBC, warning the shock could top the 1970s crisis and spike food costs via 20-30% of seaborne fertiliser from the Gulf.
Downing’s Judith McKenzie noted on BBC Radio 4, “Oil shocks don’t show up instantly.” Houthi threats to Bab al-Mandeb risk another 10% oil loss, per Macquarie’s Sean Foley, while Lipow Oil’s Andrew Lipow eyes $130 Brent soon.
“My greatest fear is that you have a general economic slowdown around the world because consumers simply run out of money as they’re spending more on energy and, in addition, food.”
Brent jumped from $72 on 27 February pre-strikes to $119.50 by 18 March, outstripping 2022 highs amid IMF stagflation alerts.