The Strait of Hormuz remains a vital maritime chokepoint and serves as the primary artery linking the Persian Gulf to international energy markets. With approximately 20% of global oil and gas shipments transiting this waterway, it is the backbone of energy security for Asia, Europe, and beyond.
Geopolitical deadlock remains the primary driver of market activity on Monday. With the Strait of Hormuz effectively closed for its 11th week, the breakdown in diplomatic talks between Washington and Tehran has sent energy prices climbing and strengthened the U.S. dollar as a liquidity safe haven.
The continued closure of the world’s most strategic maritime chokepoint, has pushed prices toward psychological resistance levels.
Brent Crude: Rose 4.3% to $105.47 per barrel.
U.S. Crude (WTI): Climbed 4.7% to $99.92 per barrel.
Analysts at JPMorgan warn that while current prices are a "headwind," the market will enter a period of "operational stress" by June if the blockade persists.
The U.S. dollar has benefited from its status as the primary global liquidity currency during times of high-intensity conflict.
USD/JPY: The dollar rose 0.33% to 157.16. Japan is banking on a hawkish Bank of Japan and support from U.S. Treasury Secretary Scott Bessent to curb the yen's weakness.
EUR/USD: The euro slipped 0.24% to $1.1757, reflecting Europe's vulnerability as a major energy importer.
Gold: Despite the crisis, gold fell 0.5% to $4,690 an ounce, as investors prioritised cash over traditional hedges.
While broader global indices showed signs of instability, specific sectors in Asia managed to post significant gains.
South Korea (KOSPI): Jumped 4%, led by heavy gains in artificial-intelligence-linked chipmakers.
China (CSI300): Rose 1.4%, even as data showed producer prices hitting a 45-month high due to energy costs.
Japan (Nikkei): Fell 0.36%, erasing earlier gains as the cost of energy imports weighed on sentiment.
U.S. Futures: S&P 500 and Nasdaq futures edged down slightly (0.1% and 0.05%) following record highs last week.
The conflict: War broke out in late February between Iran and the U.S.-led alliance.
The standoff: President Trump has rejected Tehran’s counter-proposal, which demanded an end to the war, lifting of sanctions, reparations, and formal recognition of their control over the waterway.
The next move: Global attention turns to the upcoming meeting between President Trump and President Xi Jinping in China. Gulf security, trade, and artificial intelligence (AI) are expected to dominate the discussion.
Supply Risk: The 11-week closure of the Strait is now the dominant factor in price formation.
Inflationary Pressure: Rising energy costs are manifesting in Chinese producer and consumer inflation data.
Regional Vulnerability: Japan and Europe are the most economically exposed due to their reliance on oil imports.
Liquidity Preference: Markets are currently favouring the U.S. dollar over gold as a risk-off asset.
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Iran says it has delivered on its promise of a “faster, heavier and more painful” response to Washington, striking U.S. bases, warships and commercial vessels early on Wednesday.
Four people were killed, including a child, in Ukrainian strikes on the Russian port city of Novorossiysk overnight, according to the governor of the Krasnodar region. Ukraine's drone forces commander, Robert Brovdi, said Russian military ships were destroyed in the attacks.
A TV channel was struck during a live broadcast on Tuesday, Ukrainian President Volodymyr Zelenskyy said, as Russian strikes on Kyiv killed at least three people, the city's Mayor Vitali Klitschko said. Meanwhile, drones hit civilian infrastructure in Russia's southwestern Saratov region.
U.S. Central Command (CENTCOM) said its forces destroyed five Iranian crude oil carriers after the Islamic Revolutionary Guard Corps (IRGC) allegedly launched two ballistic missile attacks against a U.S. Navy warship over the past two days.
Wildfires have broken out in Türkiye’s Antalya province, forcing hundreds of people to evacuate as strong winds fuelled the flames.
U.S. special envoys Jared Kushner and Steve Witkoff have held talks with Ukrainian President Volodymyr Zelenskyy in Kyiv on Sunday on efforts to end Russia’s war in Ukraine.
Volkswagen’s supervisory board has approved a major overhaul aimed at cutting 100,000 jobs by 2030 as the German carmaker battles weaker sales, falling profits and intensifying global competition.
Chinese Premier Li Qiang has called on American companies to expand their presence in China and pledged that Beijing would address their "reasonable concerns," as China looks to stabilise trade ties with Washington ahead of President Xi Jinping's planned visit to the U.S. later this month
Apple is entering a new era as Tim Cook steps down as chief executive after 15 years at the helm, handing the technology giant's leadership to longtime executive John Ternus.
Volkswagen is heading towards a decisive showdown with labour representatives as Germany's largest carmaker weighs sweeping restructuring measures that could lead to factory closures and tens of thousands of job losses.
Online fast-fashion retailer Shein is seeking to raise up to $1.77 billion in a Hong Kong IPO after its valuation fell around 70 per cent from its private-market peak four years ago.
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