LONDON, United Kingdom — Global oil prices surged past $110 a barrel on Monday as escalating conflict between the United States, Israel, and Iran rattled energy markets and triggered sharp declines in Asian stock markets.
Benchmark Brent crude climbed nearly 24pc to about $114.74 per barrel in early Asian trading, while Nymex light sweet crude rose more than 26pc to roughly $114.78. The spike followed intensified airstrikes over the weekend targeting Iranian infrastructure, including oil depots.
The conflict has also raised fears of prolonged disruption to shipping through the Strait of Hormuz, a strategic maritime corridor that carries roughly one-fifth of the world’s oil supply.
Financial markets across Asia reacted sharply. Japan’s Nikkei 225 index fell more than 7 percent in morning trading. Hong Kong’s Hang Seng index dropped over 3 percent, while Australia’s ASX 200 declined by more than 4 percent.
South Korea’s Kospi index recorded the steepest fall, sliding more than 8 percent. The plunge triggered a 20-minute circuit breaker—an emergency mechanism designed to halt trading temporarily to prevent panic selling. The same measure was activated earlier in the week after the index plunged by 12 percent.
Energy markets had initially appeared relatively calm when the conflict erupted a week earlier. Analysts believed shipping might continue through the Strait of Hormuz despite heightened tensions.
That expectation changed quickly after fresh attacks damaged energy infrastructure across Iran and parts of the Gulf region.
Shipping activity through the narrow waterway has now slowed dramatically, with many tankers either delaying transit or rerouting entirely. The Strait of Hormuz sits between Iran and Oman and remains one of the world’s most critical energy chokepoints.
Oil traders had expected prices to approach the $100 mark this week. Instead, markets surged within minutes of opening in Asia. Prices jumped 10 percent almost instantly before climbing another 10 percent within roughly 15 minutes of trading.
Economists warn that a prolonged disruption could push prices to historic highs.
Adnan Mazarei, a senior fellow at the Peterson Institute for International Economics, said the surge reflected growing expectations of a drawn-out conflict.
“People are realising that this won’t end quickly,” Mazarei said. “Production in some Gulf countries has already slowed, and the market is factoring in the risk of further disruptions.”
Higher crude prices also threaten to raise the cost of refined fuels and industrial inputs. Jet fuel prices could increase significantly, while fertiliser production may also become more expensive because several key chemical inputs are derived from petroleum and natural gas.
Most Gulf oil exports flow toward Asian economies. Early signs suggest Asian buyers are already scrambling to secure alternative supplies, including shipments of U.S. liquefied natural gas. Several tankers previously heading toward Europe have reportedly changed course mid-Atlantic.
U.S. President Donald Trump sought to downplay the immediate economic impact, describing higher oil prices as a temporary cost of confronting Iran.
“Short-term rises are a small price to pay for removing Iran’s nuclear threat,” Trump said in remarks carried by U.S. broadcasters.
However, his energy secretary clarified that Israel—not the United States—was responsible for targeting Iran’s energy infrastructure, amid concerns about rising domestic fuel prices.
With tensions escalating and energy routes under pressure, global markets now face mounting uncertainty over the duration and scale of the conflict—and its impact on the world economy.
