Iranian Shiite women shout slogans during Eid al-Fitr prayers, marking the end of the Muslim holy month of Ramadan, at the Mosalla Grand Mosque in Tehran, March 21, 2026.
Str | Afp | Getty Images
Asia-Pacific markets sold off sharply on Monday, with major indexes in Japan and South Korea falling more than 5% as investors fled risk assets amid an escalating conflict in the Middle East that entered its fourth week.
President Donald Trump said on Saturday it would “wipe out” Iran’s power plants if Tehran fails to fully reopen the Strait of Hormuz – a vital artery for global energy flows – within 48 hours.
Iran retaliated, threatening to target energy infrastructure and desalination facilities in the Gulf if the United States carried out its ultimatum.
Mohammad Bagher Ghalibaf, Speaker of the Iranian Parliament said saturday that attacks on the country’s power plants would “immediately” lead to retaliation against energy and oil infrastructure throughout the region.
“Critical infrastructure as well as energy and oil infrastructure throughout the region will be considered legitimate targets and irreversibly destroyed, and oil prices will rise for a long time,” Ghalibaf said on X.
Sunday, Ghalibaf extended the threat For holders of U.S. Treasury bonds, warning financial entities that purchase U.S. government bonds and “fund the U.S. military budget” would be considered legitimate targets, along with military bases.
Crude prices exploded in volatile trading on Monday. Brent crude reversed earlier losses to gain 0.65% to $112.68 a barrel as of 10:57 p.m. EST. United States West Texas Intermediate was up 0.8% at $99 a barrel.
Goldman Sachs sharply raised its oil price forecast, expecting Brent to average $110 in March-April, up from $98 previously, and WTI to average $98 in March and $105 in April.
“We now assume that Hormuz flows will remain at just 5% of normal levels for a longer period of six weeks before a gradual one-month recovery,” the Wall Street bank said, noting that prices are likely to rise during this period until investors are convinced that a prolonged disruption can be ruled out.
The spread between Brent and WTI has surpassed $14 a barrel, the largest price difference between U.S. and international crude oil benchmarks in years.
This growing gap could indicate a “maximum intensity of this oil crisis,” Chris Verrone, chief market strategist at Strategas Research, told CNBC. “Squawk Box Asia” Monday. High Brent crude prices will likely prompt traders to anticipate a longer-lasting conflict, he added.
from Japan Nikkei 225 fell almost 5%, widening losses from the previous session, while the broad-based Topix fell 4.4%.
South Korean flagship Kospi plunged more than 6%, and small-cap Kosdaq fell almost 5%. The Korean stock market negotiation briefly suspended after the Kospi 200 futures index fell more than 5%.
Australia S&P/ASX200 decreased by 2.4%. that of Hong Kong Hang Seng Index and the continental CSI 300 fell almost 2% at the open.
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In the United States, stock futures were little changed overnight. THE Dow Jones Industrial Average was flat and the S&P500 lost 0.1% while the Nasdaq Composite futures fell 0.2%.
All three major indexes finished last week lower, with the S&P 500 falling more than 1.5% and falling below its 200-day moving average for the first time since May. The Dow Jones, which suffered its first four-week losing streak since 2023, and the Nasdaq each fell about 2% for the week.
— CNBC’s Lisa Kim and Fred Imbert contributed to this report.