Oil prices surged in Asian trade on Monday as escalating military strikes in the Middle East unsettled investors, triggering a shift into bonds and gold while equity futures retreated.
Brent crude climbed 9% to US$79.42 a barrel, briefly moving above US$80, while US crude rose 8.6% to US$72.61. Gold gained 1.4% to US$5,350 an ounce as demand for safe-haven assets strengthened. S&P 500 futures fell 0.8% and Nasdaq futures dropped 0.9%, while Nikkei futures slipped 1.1%.
The conflict between the United States, Israel and Iran showed little sign of easing, raising concerns about supply disruptions through the Strait of Hormuz, a key waterway that handles roughly a fifth of global seaborne oil and liquefied natural gas trade. Tanker traffic has slowed sharply amid security and insurance concerns.
“The most immediate and tangible development affecting oil markets is the effective halt of traffic through the Strait of Hormuz, preventing 15 million barrels per day of crude oil from reaching markets,” said Jorge Leon, head of geopolitical analysis at Rystad Energy. “Unless de-escalation signals emerge swiftly, we expect a significant upward repricing of oil.”
A sustained spike in crude prices risks reigniting global inflation while weighing on consumer and business demand. Alan Gelder of Wood Mackenzie noted that oil prices during the 1970s embargo surged 300% to around US$12 per barrel, equivalent to about US$90 in 2026 terms, suggesting further gains are plausible if supply losses deepen.
Currency markets reflected the uncertainty, with the US dollar easing against the Swiss franc but gaining modestly against the yen and euro. Meanwhile, investors are bracing for a heavy week of US data, including manufacturing, retail sales and payrolls, which could shape expectations for Federal Reserve rate cuts.
