Oil prices surged sharply while Asian stock markets declined on Monday (March 2, 2026), as escalating tensions in the Middle East rattled global markets. The spike followed US and Israeli strikes on Iran and subsequent instability around the strategically vital Strait of Hormuz, where multiple vessels were reportedly attacked. Report BSS/AFP
Oil Prices Jump, Gold Gains
In early Asian trading, Brent crude — the international benchmark — soared to just above $80 per barrel, up from Friday’s close of $72.87, before easing slightly to below $79.
Gold, traditionally viewed as a safe-haven asset during geopolitical crises, rose by 2 percent.
Brent prices had already climbed last week ahead of the strikes that began Saturday and reportedly resulted in the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei.
US President Donald Trump urged Iranians to rise up against their government and suggested the conflict could last up to four weeks.
Stock Markets Under Pressure
Asian equity markets reacted negatively:
• Japan’s Nikkei index fell 2.2 percent in early trade.
• Sydney’s market declined 0.5 percent.
Analysts expect broader market volatility, with transportation and tourism sectors particularly vulnerable.
Strait of Hormuz: A Critical Chokepoint
Although Iran has not formally declared a closure of the Strait of Hormuz, its Revolutionary Guards have warned vessels against transiting the waterway. Around 20 percent of global seaborne oil trade passes through this narrow passage.
On Sunday (March 1, 2026), at least two ships were reportedly struck — one off Oman’s coast and another near the UAE, according to the British maritime security agency UKMTO. Iranian state television claimed that an oil tanker was hit and was sinking after attempting to pass “illegally” through the strait.
Major shipping companies have already suspended transit through the route, citing escalating security risks and soaring insurance premiums.
Supply Risks and Price Projections
According to Jorge Leon of Rystad Energy, a prolonged closure of the Strait of Hormuz could disrupt 8 to 10 million barrels per day (bpd) of crude oil supply.
Amena Bakr, head of Middle East and OPEC+ research at Kpler, warned that oil prices could reach $90 per barrel if tensions persist. She noted that even strategic petroleum reserves would struggle to compensate for such a large supply gap.
While OECD countries maintain emergency oil reserves equivalent to 90 days of imports, analysts caution that prices above $100 per barrel cannot be ruled out if the crisis drags on.
Political and Economic Implications
Michelle Brouhard, another Kpler analyst, described high oil prices as “the Achilles’ heel” of President Trump, who campaigned on maintaining low energy prices. With US mid-term elections approaching later this year, sustained high oil prices could carry significant political consequences.
Iran, analysts suggest, may seek to keep crude prices elevated to exert economic pressure on Washington.
Broader Economic Impact
Gas prices are also expected to rise, as Qatar — a key exporter of liquefied natural gas (LNG) — ships its supplies through the Gulf region.
The last time oil prices exceeded $100 per barrel was at the onset of the Ukraine war, which triggered a prolonged surge in energy and consumer prices globally.
Economist Eric Dor of IESEG School of Management warned that prolonged high energy prices could:
• Raise fuel and transportation costs
• Increase shipping and air transport expenses
• Weaken economic growth
“If it lasts only a few days, the impact will be limited,” Dor said. “But if it continues over a longer period, it could add to recessionary pressures.”
While defense-related stocks may benefit from heightened tensions, analysts expect overall market declines, particularly in aviation, maritime transport, and tourism sectors.
As geopolitical risks mount in the Gulf, energy markets remain highly sensitive, with oil prices and investor sentiment likely to fluctuate in the days ahead.
