Global oil prices surged on Monday as tensions escalated between the United States, Iran, and Israel, raising fears of a broader regional conflict. Brent crude, the international benchmark, rose more than 3 percent to exceed $116 per barrel—the highest level since March 19—according to Qatar-based broadcaster Al Jazeera.
Market instability deepened after Iran warned that the United States could launch a ground offensive. Iran’s Parliament Speaker, Mohammad Bagher Ghalibaf, said any American troops entering Iranian territory would face severe retaliation, warning they would be “burned alive” and that their regional allies would also be punished.
At the same time, Asian stock markets saw sharp declines. Japan’s Nikkei 225 and South Korea’s KOSPI index both fell by more than 4 percent on Monday morning. Since the conflict began on February 28, oil prices have risen by nearly 60 percent.
The Strait of Hormuz, a vital global energy corridor, is now effectively closed, disrupting about one-fifth of the world’s oil and liquefied natural gas (LNG) supplies. This has raised fears of one of the most serious energy crises in decades.
US President Donald Trump has issued an ultimatum, demanding that the Strait of Hormuz be reopened by April 6. He warned that failure to comply could lead to the destruction of Iran’s energy infrastructure. However, speaking to reporters on Sunday night, Trump also said a deal with Iran could be reached “very soon.” Pakistan is reportedly working to mediate indirect talks between the two sides.
Despite these diplomatic efforts, Tehran has rejected Washington’s reported 15-point peace proposal. Instead, Iran has put forward its own conditions for a ceasefire, including compensation for war damages and recognition of its sovereignty over the Strait of Hormuz.
Greg Newman, CEO of Onyx Capital Group, told Al Jazeera that the full impact of the supply disruption may take about three weeks to be felt in European markets. He warned that Brent crude prices could rise above $120 per barrel and continue climbing. According to him, the current market volatility is more severe than at any time in the past, and its full economic impact will become clearer in the coming months.
Before the conflict escalated, around 120 ships passed through the Strait of Hormuz each day. That number has now dropped sharply. However, as part of ongoing diplomatic efforts, Iran has made limited concessions. Pakistan’s Foreign Minister Ishaq Dar said Tehran has allowed 20 Pakistani-flagged vessels to pass through the strait. Some ships from countries outside the US-Israel alliance, including Malaysia, have also been granted passage. Last Thursday, seven vessels not linked to Iran successfully crossed the waterway.
