Oil jumps as tensions escalate in the Gulf

The developments heightened concerns over disruptions to Middle East energy supplies and added pressure on the global economy.

Peace talks break down

Negotiations held over the weekend in Islamabad ended without an agreement, dealing a setback to hopes of ending the six-week conflict.

The US delegation blamed Iran’s refusal to abandon its nuclear programme, while Iranian officials accused Washington of making excessive demands and changing its conditions during the talks.

Blockade raises supply fears

US President Donald Trump said in a social media post that the aim was to clear the strait of mines and reopen it to shipping, while insisting Iran must not profit from controlling the waterway.

He said the United States Navy would begin blockading ships entering or leaving the Strait of Hormuz, adding that any Iranian forces targeting US or civilian vessels would face overwhelming retaliation.

The blockade was described as applying specifically to vessels travelling to or from Iranian ports.

The US military said it would begin enforcing the blockade at 1400 GMT on Monday, effectively taking control of maritime traffic in the region.

Iranian authorities responded by asserting control over the strait and warning of severe consequences in the event of escalation. Military officials in Tehran dismissed the US move as unserious while signalling readiness to respond.

Markets react sharply

Oil prices rose by about eight per cent, with benchmark crude contracts trading above $100 per barrel.

Equity markets across Asia fell, with major indexes in Tokyo, Hong Kong and Seoul down more than one per cent. Other regional markets, including Shanghai, Sydney, Singapore, Taipei and Jakarta, also recorded losses.

The spike in oil prices reversed declines seen the previous week, when a temporary ceasefire between the United States and Iran had eased market concerns.

Ongoing uncertainty weighs on outlook

Analysts warned that the blockade is a significant escalation rather than a limited pressure tactic, heightening the risk of a prolonged conflict.

Market observers highlighted the persistent lack of trust between the two sides as a major obstacle to a diplomatic breakthrough.

At the same time, investors are monitoring efforts to ease tensions elsewhere in the region, including attempts to resolve fighting between Israel and Hezbollah.

Inflation concerns intensify

Rising energy prices have fuelled fears of persistent inflation, with recent data showing US consumer prices climbing to 3.3 per cent in March, the highest level in nearly a year.

The prospect of sustained geopolitical instability is expected to keep inflation elevated and could delay any interest-rate cuts.