Oil markets surged to fresh four-year highs as geopolitical tensions intensified, following Donald Trump’s warning that a US blockade of Iranian ports could persist for months.
Brent crude jumped 7.1% to above $126 per barrel—its highest level since 2022—while US benchmark West Texas Intermediate climbed 3.4% to above $110. The rally was driven by concerns that the Strait of Hormuz could remain closed for an extended period, disrupting a route that typically carries around a fifth of global oil and gas supplies.
Despite Tehran submitting a proposal to reopen the strait, reports suggest Washington remains unconvinced of Iran’s intentions. According to The Wall Street Journal, US officials have been instructed to prepare for a prolonged blockade aimed at pressuring Iran to abandon its nuclear programme.
The sharp move in energy prices weighed on global equities. Markets across Asia—including Tokyo, Hong Kong, Sydney, Seoul, Taipei, Mumbai, Bangkok, Manila and Jakarta—closed lower, while Shanghai was broadly flat. Safe-haven demand lifted the US dollar against major peers.
On Wall Street, trading was subdued. The S&P 500 and Nasdaq Composite ended little changed, while the Dow Jones Industrial Average fell 0.6%, as investors awaited a wave of corporate earnings.
After-hours moves were more pronounced. Meta Platforms dropped 7% after outlining increased AI-related capital spending, disappointing investors. In contrast, Amazon, Microsoft and Alphabet all reported strong growth in their cloud computing businesses.
Markets remained largely rangebound following the Federal Reserve decision to hold interest rates at 3.75%, as policymakers continue to weigh inflation risks linked to rising energy prices and geopolitical instability.
