Oil Prices Surge, Asian Markets Tumble as Middle East Crisis Threatens Strait of Hormuz

Brent crude hits 5-month high as investors brace for Iran’s potential retaliation following US-Israel strikes on nuclear sites, risking a chokepoint in global oil trade.

New Delhi, June 23 – Global financial markets reeled on Monday as oil prices jumped over 2% and Asian stock indices plunged, amid heightened fears that Iran may retaliate against the recent US-Israel joint strikes on its nuclear facilities. With the Strait of Hormuz—a key artery for global energy trade—now under threat of closure, investors are bracing for more volatility in oil, equities, and currencies.

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Oil Soars on Supply Disruption Fears

Brent crude rose 2.7% to $79.12 per barrel, its highest since January 2025, while US West Texas Intermediate gained 2.8% to $75.98. The surge comes amid concerns that Tehran could move to block the Strait of Hormuz, a narrow waterway that handles nearly a quarter of the world’s oil and 20% of global LNG shipments.

Iran, the world’s ninth-largest oil producer with an output of 3.3 million barrels per day, exports nearly half of its production. A full or even partial closure of the strait would paralyze oil flows from the Gulf region, leading to price shocks worldwide.

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Tehran’s Press TV reported that the Iranian parliament has already approved a measure to close the strait—a move observers warn could trigger further conflict.

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Asian Markets Hit Hard

Asian stock markets reflected the growing anxiety. Key indices saw steep falls:

• Nikkei (Tokyo): -0.6%
• Kospi (Seoul): -1.4%
• ASX (Sydney): -0.7%
• MSCI Asia-Pacific (ex-Japan): -0.5%

European futures also pointed lower:

• EUROSTOXX 50: -0.7%
• FTSE: -0.5%
• DAX: -0.7%

US futures were less affected, with S&P 500 down 0.5% and Nasdaq futures falling 0.6%, showing some resilience thanks to America’s status as a net energy exporter.

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Currency, Gold, and Bond Markets React Cautiously

In currency markets:

• Dollar gained 0.3% against the yen (146.48)
• Euro slipped 0.3% to $1.1481
• Dollar Index rose 0.17% to 99.078

Gold, typically a safe haven, dipped 0.1% to $3,363 an ounce. Surprisingly, there was no major flight to US Treasuries, with 10-year yields rising 2 basis points to 4.397%, reflecting uncertainty over the duration and scope of the geopolitical risk.

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Analysts Warn of $100 Oil Scenarios

Analysts at JPMorgan noted that past instances of regime change or regional upheaval have historically driven oil prices up by as much as 76%, with average increases of 30% over time.

“Selective disruption of shipping lanes is more likely than full closure of the strait,” said Vivek Dhar, commodities analyst at Commonwealth Bank of Australia. “But even that could push Brent to $100 per barrel,” he warned.

Optimists are hoping Iran might de-escalate or that internal political changes could steer the country away from confrontation. Yet, with the recent strikes on Iranian nuclear sites and retaliatory threats from Tehran targeting US bases in the region, the risk of a drawn-out conflict remains very real.

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Tags:
Middle East crisis, Oil prices, Strait of Hormuz, Iran retaliation, US-Israel attacks, Asian markets crash, Brent crude, global energy trade, Tehran, market volatility, energy geopolitics