Crude soars, stocks drop after US strikes on Iran

March 02, 2026 / 1:42 PM

Sharjah24 - AFP: Oil prices soared and stocks fell in Asia on Monday after US-Israeli strikes on Iran sent investors fleeing the prospect of an extended conflict in the crude-rich Middle East. Brent briefly spiked almost 14 percent and West Texas Intermediate nearly 12 percent at the start of business after the attack on the Islamic republic, which killed supreme leader Ayatollah Ali Khamenei and other senior officials.

Impact on shipping

The bombings have also seen the vital Strait of Hormuz -- through which around 20 percent of global seaborne oil passes -- effectively shut and several ships attacked, fanning supply fears.

Equity markets across Asia sank, with Tokyo, Hong Kong, Singapore, Mumbai, Bangkok, Wellington and Taipei all deep in the red. US futures were down more than one percent. Still, Shanghai edged up and Sydney was flat.

Airline and energy stocks

Airline stocks took a battering as they were forced to cancel flights to the region. Cathay Pacific sank three percent in Hong Kong, Sydney-listed Qantas dived 5.4 percent and Singapore Airlines was off 4.3 percent. Japan's ANA and JAL fell more than five percent.

However, energy firms rallied, with Australia's Woodside Energy and Santos each jumping more than six percent, while PetroChina added almost four percent in Hong Kong. Inpex in Japan was up more than six percent.

Safe havens and market sentiment

Gold -- a key go-to in times of turmoil -- climbed two percent, while the dollar also saw a boost from a rush into safe havens.

While the strikes have ramped up geopolitical worries, traders wound down their initial bets, with crude sitting around five percent higher and stock markets paring losses.

Brent had already rallied last week on growing concerns Trump would order an attack as talks aimed at curtailing Iran's nuclear programme stuttered.

US President Donald Trump urged Iranians to rise up against their government and said the war could last "four weeks".

The powerful head of Iran's Supreme National Security Council said Monday the country "will not negotiate with the United States" and denied media reports that officials had sought to initiate talks with the Trump administration.

Iran continued a retaliatory missile and drone campaign in the Gulf, adding to fears the conflict could spread as Tel Aviv launched attacks on Lebanon after Tehran-backed militant group Hezbollah fired rockets at Israel in retaliation for the killing of Khamenei.

Strait of hormuz developments

While Iran has not officially closed the Strait of Hormuz, its Revolutionary Guards have warned against transiting the waterway.

Iranian state television said an oil tanker was hit and was sinking after trying to "illegally" pass through the strait.

The main shipping companies have already confirmed they are suspending the passage of their fleets through the strait.

Energy prices and economic impact

In theory, oil-importing countries have reserves, with OECD members required to maintain 90 days' worth of stocks, but prices above $100 cannot be ruled out.

Gas prices also soared Monday -- dealing another blow to the world economy -- as Qatar is a key exporter of liquefied natural gas, heightening inflationary risks.

Rising energy prices, increased shipping costs and loss of revenue for air transport could have "a harmful effect on growth", said economist Eric Dor, from the IESEG School of Management in Paris.

Implications for global trade

Analysts warn that continued disruptions in the Gulf could affect global supply chains, shipping costs, and energy markets, potentially accelerating inflation and slowing growth worldwide.