Major stock markets across Asia declined on Monday as tensions between Washington and Tehran intensified, with the Iran conflict entering its fourth week.
Japan’s benchmark Nikkei 225 fell by nearly 3.6%, while South Korea’s KOSPI dropped by almost 6%.
US President Donald Trump warned on Saturday that he would “obliterate” Iranian power facilities if Iran did not reopen the key Strait of Hormuz shipping route. In response, Iran said it would retaliate against any strikes by targeting critical infrastructure in the region, including energy facilities.
Japan and South Korea have been especially affected by the conflict due to their heavy reliance on oil and gas supplies that typically pass through the Strait of Hormuz.
Iran remains at the centre of rising geopolitical tensions impacting global markets.
Iran has effectively restricted access to the Strait of Hormuz—one of the world’s busiest energy corridors—following attacks by the US and Israel on February 28.
Roughly 20% of global oil and liquefied natural gas (LNG) typically flows through this strategic waterway, and the ongoing conflict has pushed global fuel prices sharply higher.
On Monday, International Energy Agency (IEA) chief Fatih Birol warned that the situation could trigger one of the most severe energy crises in decades.
Speaking at the National Press Club in Australia’s capital, Birol compared the current crisis to the oil shocks of the 1970s and the effects of Russia’s 2022 invasion of Ukraine.
“This crisis as things stand is now two oil crises and one gas crash put all together,” he said.
US President Donald Trump warned in a social media post at 23:44 GMT on Saturday that if Iran did not “FULLY OPEN, WITHOUT THREAT” the Strait of Hormuz within 48 hours, the United States would target and destroy Iranian power plants, starting with the largest.
The warning followed Iranian missile strikes on the Israeli city of Dimona and a second attack on the nearby town of Arad.
In response, Iranian parliament speaker Mohammad Bagher Ghalibaf said on Sunday that energy and desalination infrastructure in the region would be “irreversibly destroyed” if Iran’s power facilities were attacked.
Such developments risk significantly escalating the conflict, which has already disrupted global energy supplies, driven up prices, and caused fuel shortages.
Elsewhere in Asia-Pacific, markets also declined on Monday. Hong Kong’s Hang Seng Index fell by nearly 3.5%, while the Shanghai Composite Index dropped about 2.5%.
Global oil prices remained relatively steady, with Brent crude rising 0.45% to $112.69 per barrel, while US benchmark oil climbed 0.7% to $98.93.
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