Global markets roiled as Iran war triggers oil surge and Asian stock declines

Beijing — Global financial markets experienced significant turbulence on Monday as the ongoing conflict involving Iran sent shockwaves through commodities and equities, particularly in Asia.

Oil prices soared by approximately 25 percent, reaching their highest levels since mid-2022. According to a report, Brent crude was on track for its largest single-day gain on record. The surge in oil prices was attributed to concerns over tightening global energy supplies amid the escalating hostilities in the Middle East. Tony Sycamore, an analyst at IG Markets, noted in a statement, “The violent reaction stems from the markets seeing no obvious offramp in the escalating Middle East conflict, now a high-stakes standoff where neither side appears willing to blink first.” He added, “The risk of more lasting economic damage continues to build by the day.”

In contrast, gold prices dropped by 2 percent as investors shifted towards the strengthening US dollar, which was buoyed by the geopolitical uncertainty and reduced expectations for imminent interest rate cuts. The Chinese yuan also weakened, hitting its lowest level in a month against the rebounding dollar.

Asian equity markets were particularly hard hit. Both Hong Kong and mainland China stocks tumbled, reflecting investor anxiety over the regional and global economic outlook. The Express Tribune reported that the yuan’s decline was notable against the backdrop of the dollar’s resurgence.

The impact of rising oil prices extended to agricultural markets, especially edible oils, which saw gains due to their significant role in biofuel production. Grains also followed the upward trend. Meanwhile, aluminium prices firmed amid concerns over supply disruptions, even as other metals faced downward pressure from the stronger dollar.

In a major political development, Iran on Monday announced Mojtaba Khamenei as the successor to his father, Ali Khamenei, as Supreme Leader.

The ongoing conflict and its economic repercussions have left markets unsettled, with analysts warning of the potential for deeper and more lasting damage if tensions persist.