Asian stock markets have started the week with sharp losses after the price of oil exceeded 100 dollars per barrel for the first time in almost four years, amid the military escalation in the Middle East and the disruption of maritime traffic in the Strait of Hormuz, one of the most important energy routes on the planet.
In the first hours of the session, South Korea's Kospi fell by more than 8%, while Tokyo's Nikkei 225 recorded declines of over 7%, dragged down by market concern over the impact that the war in Iran may have on the global oil supply.
The falls also extended to other markets in the region. The stock markets of Australia and New Zealand were falling back more than 3%, while the main indexes of China and Hong Kong were opening the day with losses after the weekend.
Oil shoots up after the blockade of the Strait of Hormuz
The rebound in crude oil is directly linked to the military escalation in the Persian Gulf. West Texas Intermediate (WTI), the main benchmark for US oil, rose by more than 25%, reaching 115 dollars per barrel, while Brent surpassed 114 dollars after soaring by more than 23%.
The markets react thus to the interruption of maritime traffic in the Strait of Hormuz, a strategic passage through which nearly 20% of the oil and gas consumed in the world transits.
The war between the United States, Israel, and Iran has generated fears about possible prolonged interruptions of the global energy supply, which has provoked an immediate reaction in the financial and energy markets.
Blow to large Asian companies
The losses in the Asian stock markets especially affected the large industrial and technological groups of the region.
The technology index Kosdaq, which groups technology and mid-capitalization companies in South Korea, also recorded losses exceeding 5%.
Japan and South Korea fear for their energy security
The impact of the oil rebound especially worries countries highly dependent on energy imports, such as Japan and South Korea.
Japan imports about 95% of the oil it consumes from the Middle East, which makes the country one of the most exposed to any alteration in the Gulf.
The Japanese Prime Minister, Sanae Takaichi, recalled that the country has strategic reserves equivalent to 254 days of consumption, and pointed out that the Government is studying releasing part of those stocks to contain the impact on the markets.
South Korea, the world's fourth-largest oil importer, is also analyzing measures to guarantee the stability of energy supply.
Trump minimizes the impact of oil
While markets react with nervousness, the president of the United States, Donald Trump, has downplayed the surge in oil prices.
In a message published on his social network Truth Social, Trump stated that the increase in the price of crude oil is “a small price to pay” for international security.
“The short-term increase in oil prices, which will fall rapidly when the destruction of Iran's nuclear threat ends, is a very small price to pay for the security and peace of the United States and the world,” the leader wrote.
Fear of a new global energy crisis
The jump in oil above 100 dollars per barrel has rekindled fears of a new global energy crisis, especially if the conflict in the Middle East continues to escalate or if maritime traffic in the Strait of Hormuz remains interrupted for longer.
The analysts warn that any prolonged blockade of this energy route could cause new oil price increases and strong volatility in international financial markets.