On Monday, March 2, oil prices surged and global stock markets came under pressure after large-scale U.S. and Israeli strikes on Iran heightened fears of major disruptions to the global economy.
Brent crude jumped as much as 13% in early trading, reaching $82 a barrel—the highest level in the past 14 months. The sharp rise was driven by the effective halt of shipping through the Strait of Hormuz—one of the world’s key trade routes, carrying a significant share of global oil and gas supplies.
Asian markets reacted with declines. Japan’s Nikkei 225 fell nearly 2.4%, later paring losses to 1.5%. Pre-market trading also pointed to a likely drop in U.S. stocks. In Australia, the ASX 200 opened sharply lower, then partially recovered and traded about 0.4% down. In China, the CSI 300 slipped 0.6%.
As geopolitical risks rose, investors moved into safe-haven assets. Gold prices climbed 2.8% to $5,397.10 an ounce.
U.S. and Israeli military strikes on Iran continued with no sign of easing. Donald Trump suggested the conflict could drag on for another four weeks and said the attacks would continue until U.S. objectives are met.
Although oil prices pulled back somewhat from their morning highs, Brent was still up about 4% in early trading.
Markets remained sharply focused on the Strait of Hormuz, which carries about one-fifth of global oil supplies and a substantial share of seaborne liquefied gas shipments. According to reports, within hours of the U.S. and Israeli strikes Tehran warned tankers in the strait that vessel passage would be prohibited.
According to the UK Maritime Trade Operations agency, two vessels were attacked in the strait—one off the coast of Oman, the other near the United Arab Emirates. Iran has not officially confirmed a blockade of the strait, but maritime tracking services recorded a buildup of tankers on both sides, as vessels feared attacks or encountered insurance difficulties.
The International Maritime Organization urged ships to avoid transiting the Strait of Hormuz. Its secretary-general, Arsenio Dominguez, said he was deeply concerned by reports of sailors being injured in the attacks. “I urge all shipping companies to exercise the utmost caution,” he said. “Where possible, vessels should refrain from transiting the affected area until conditions improve.”
On Sunday, shipping group Maersk said it was suspending the passage of its vessels not only through the Strait of Hormuz but also through the Suez Canal—another critical artery of the global economy—citing security concerns. On the same day, countries in the OPEC+ alliance agreed to a moderate increase in oil production of 206,000 barrels a day starting in April, though a large share of that volume would still need to be shipped out of the region by sea.
Iran remains one of the cartel’s largest producers, accounting for about 4.5% of global oil supplies. Any disruption to its exports could ripple across the entire market.
“The most immediate and tangible factor for oil markets has been the effective shutdown of traffic through the Strait of Hormuz, which blocks shipments of 15 million barrels of oil a day,” said Jorge Leon, head of geopolitical analysis at Rystad Energy. “If there are no signals of de-escalation in the near term, we expect a significant upward repricing of oil.”