Immediate effect on stock markets and oil prices of the Middle East war. Two haven assets, in high demand
Oil prices rose sharply on Monday and stocks fell sharply amid a military conflict in the Middle East that appears far from over. Investors took refuge in assets considered safe, the dollar and gold, notes Reuters.
Brent rose 4.5 percent to $76.07 a barrel after temporarily touching $82, and U.S. crude gained 3.9 percent to $69.59 a barrel. Gold rose 1% to $5,327 an ounce.
Military strikes launched by the United States and Israel on Iran show no signs of slowing down, and Tehran has responded by firing missiles into the region, raising the risk of the conflict spreading to neighboring states.
US President Donald Trump suggested in an interview with the Daily Mail that hostilities could continue for another four weeks, later announcing that the attacks would continue “until US objectives are achieved”.
The third day of conflict in the Middle East brought heavy explosions in Beirut after Israel ordered the evacuation of 50 Lebanese villages in response to Hezbollah attacks with “swarms of drones”.
The Strait of Hormuz keeps the market close
All eyes are now on the Strait of Hormuz, through which about a fifth of the world's seaborne oil trade and 20% of liquefied natural gas pass.
The Strait of Hormuz, between Iran and Oman, connects the Persian Gulf to the Arabian Sea, and oil tankers carrying crude oil from Saudi Arabia, Iraq, Iran, the United Arab Emirates, Kuwait and Qatar pass through it daily.
Although the route has not been officially blocked, maritime monitoring data shows oil tankers stationed at the entrances to the strait, either out of fear of attacks or because they can no longer secure transit insurance.
Jorge Leon, head of geopolitical analysis at Rystad Energy, an independent research company in Norway, says that “effectively stopping traffic through Hormuz would mean blocking 15 million barrels a day” which would affect oil markets.
“We expect a significant increase in the price of oil”
“If there are no signs of easing quickly, we expect a significant increase in oil prices,” the expert said.
A prolonged oil shock risks reigniting inflation globally, acting as an additional tax on businesses and consumers that could dampen demand.
Even though OPEC+ agreed on Sunday to a modest production increase of 206,000 barrels per day for April, much of that oil still has to come out of the Middle East, precisely through the region now under stress.
“In our view, the closest historical event is the Middle East oil embargo of the 1970s, which led to a 300% increase in oil prices to about $12/barrel in 1974,” said Alan Gelder, vice president of refining, chemicals and oil markets at Wood Mackenzie, a leading energy and natural resources research, consulting and data analysis firm.
Adjusted to the 2026 value, that would mean around $90 a barrel, a threshold that, in the current context of supply disruptions, seems easily surmountable, according to Gelder.
What's happening in Asian markets
For Japan, which fully imports oil, the energy price hike is a direct blow and the Nikkei 225 index lost 1.4%, with airlines being among the most affected. In contrast, the Chinese CSI 300 index remained relatively stable.
MSCI's broadest index of Asia-Pacific shares excluding Japan fell 1.2 percent.
In the Middle East, the United Arab Emirates and Kuwait temporarily closed stock exchanges citing “exceptional circumstances.”
In Europe, EURO STOXX 50 futures were down 1.4% and DAX futures were down 1.3%. On Wall Street, S&P 500 and Nasdaq futures each lost 0.6 percent.
The dollar is profiting
The oil shock was also transmitted to the foreign exchange market, where the dollar was the main gainer. The United States is a net exporter of energy and US Treasuries remain a liquid haven in times of crisis, pushing the euro down to $1.1788.
The yield on 10-year US Treasuries stabilized at 3.97%, after temporarily falling to an 11-month low.
The tensions come amid a financial scandal in Britain. Mortgage lender MFS went into special administration after allegations of financial irregularities, with debts of £2bn.
Its collapse amplified fears in the banking sector and hit financial stocks at a time when Wall Street was already fragile due to volatility in AI stocks.
In parallel, investors are preparing for a week full of economic data from the US: the ISM industrial survey, one of the most watched economic indicators in the US, retail sales and especially the jobs report.
Any sign of weakness could undermine confidence in an economy that disappointed in the fourth quarter, but would also likely reduce the chances of a rate cut by the Federal Reserve.
