Oil prices surge past $103 a barrel after US announces blockade of Iran

Asian stock markets opened the week in the red as heightened geopolitical tensions rattled investor confidence, following a dramatic escalation in the Middle East. The renewed uncertainty comes after US President Donald Trump announced a naval blockade targeting maritime traffic linked to Iran, triggering sharp volatility across global energy and equity markets.

Oil prices surged significantly in response to the developments. Brent crude, the international benchmark, jumped more than 8 percent on Sunday, briefly climbing above $103 per barrel. This marks the first time the benchmark has crossed the psychologically critical $100 level since last week, when prices had previously spiked beyond $111 per barrel amid earlier conflict-driven disruptions.

The latest surge reflects growing fears over potential supply constraints through the Strait of Hormuz, one of the world’s most strategic energy chokepoints, responsible for transporting roughly one-fifth of global oil and liquefied natural gas shipments.

President Trump stated on Sunday that the US Navy would block all vessels entering or exiting the Strait of Hormuz following the breakdown of ceasefire negotiations between Washington and Tehran over the weekend. However, US Central Command later clarified that the directive would be more limited in scope, applying only to vessels travelling directly to or from Iran, rather than enforcing a full maritime shutdown. The revised operation is scheduled to begin Monday at 10:00am Eastern Time (14:00 GMT).

The conflicting statements added to market uncertainty, as traders struggled to assess the true scale of the disruption. Analysts noted that even partial restrictions in the Strait could significantly impact global shipping routes, insurance premiums, and energy supply chains.

The situation follows weeks of instability in the region after US-Israeli strikes on Iranian targets prompted Tehran to impose a de facto restriction on the Strait of Hormuz. Although Iran has allowed a limited number of vessels to pass under strict inspection and pre-approval conditions, maritime traffic has sharply declined compared with normal levels.

According to maritime intelligence firm Windward, only 17 ships crossed the Strait on Saturday, a steep drop from the approximately 130 daily transits recorded before the conflict began. The reduction highlights the ongoing disruption to one of the world’s most critical energy corridors.

Brent crude prices have experienced extreme volatility in recent weeks, surging above $119 last month before falling below $92 last week after a temporary US-Iran ceasefire agreement was announced following more than six weeks of conflict. Despite the fragile truce officially remaining in place until April 22, traders remain skeptical about its durability.

The geopolitical tension quickly spilled into global financial markets. Major Asian indices opened lower on Monday as investors reacted to the escalating risk environment. Japan’s benchmark Nikkei 225 declined by 0.9 percent in early trading, while South Korea’s KOSPI fell by more than 1 percent amid broad risk-off sentiment.

US stock futures also weakened outside regular trading hours. Futures tied to the S&P 500 dropped approximately 0.8 percent, reflecting growing concern that energy price shocks and geopolitical instability could weigh on corporate earnings and global economic growth.

Market strategists warn that continued uncertainty around the Strait of Hormuz could fuel further volatility in both energy and equity markets, particularly if shipping disruptions persist or escalate into broader military confrontation.