Oil prices jumped by 5% on Monday after US President Donald Trump reinstated the blockade of Iranian shipping in the Gulf and announced a 20% toll on other countries using the Strait of Hormuz. Brent crude climbed to $79.37 a barrel, rising from $72.48 before the escalation.
The market move came as the US and Iran exchanged strikes over the weekend, with Trump declaring the US as 'the Guardian of the Hormuz Strait' on social media. Airline shares fell on both sides of the Atlantic, and Asian stock markets dropped sharply, with South Korea's Kospi down 8% and Japan's Nikkei 225 falling 2%.
US tech stocks also declined, with the Nasdaq down 1% and the S&P 500 0.4% lower. Chip companies were hit hard, including South Korea's SK Hynix slumping 15% and Samsung Electronics sinking 10%.
The US launched further strikes on Sunday against Iran, which retaliated. A fragile interim truce signed last month is now in doubt, analysts at Goldman Sachs noted, warning of 'upside risk to oil prices'. Shipping data from Kpler showed only six vessels crossed the strait on Sunday, the fewest in five weeks, while Iran's Islamic Revolutionary Guard Corps said it stopped two ships.
Gold fell 1.4% to $4,083 an ounce amid fears of higher interest rates. Meanwhile, Opec lowered its 2026 global demand growth forecast to 780,000 barrels per day, down from 970,000, marking a third consecutive revision. The International Energy Agency expects demand to decline by 1 million barrels per day in 2026.
