Asia Markets Plunge as Iran Threatens Energy Infrastructure Attacks

Asian stock markets experienced significant declines Monday as tensions escalated over the Strait of Hormuz, with Iran threatening to close the vital waterway in response to potential U.S. Military action. Japan’s Nikkei 225 closed down 4 percent, while South Korea’s KOSPI fell 4.5 percent in early trading. Hong Kong’s Hang Seng Index dropped approximately 2 percent, and Australia’s ASX 200 saw a decline of 1.6 percent. New Zealand’s NZX 50 dipped by 1.3 percent.

The sell-off follows a warning from former U.S. President Donald Trump, who threatened to “obliterate” Iran’s power plants if Tehran does not reopen the Strait of Hormuz. Trump’s ultimatum, delivered via his social media platform on Saturday, set a deadline that expires at 23:44 GMT Monday. The strait, a critical chokepoint for global energy supplies, is currently being used by a limited number of vessels flagged by China, India, and Pakistan.

Tehran has vowed to completely shut down the Strait of Hormuz and launch retaliatory strikes against energy and water infrastructure across the region should Trump proceed with military action. This escalation adds to existing fears of a wider regional energy crisis, already fueled by the ongoing conflict between the U.S., Israel and Iran, which began with strikes on February 28th. Oil prices have surged more than 50 percent since the start of the conflict.

Brent crude futures initially rose more than 1.5 percent to surpass $114 a barrel before settling around $112 as of 02:00 GMT. Analysts predict further increases in energy prices if the strait remains closed, with some forecasting oil reaching $150 or even $200 a barrel.

On Sunday, Trump held a phone conversation with UK Prime Minister Keir Starmer to discuss the situation in the Middle East and the importance of reopening the Strait of Hormuz. Starmer’s office stated that both leaders agreed that unblocking the strait is “essential to ensure stability in the global energy market.”

The U.S. State Department has warned American citizens worldwide to exercise “increased caution,” citing ongoing tensions. Despite Trump’s threat, his administration has offered conflicting signals regarding the war’s objectives and duration. Hours before issuing the ultimatum, Trump suggested his administration was “very close to meeting our objectives as we consider winding down” military operations. However, Israeli military spokesperson Lieutenant Colonel Nadav Shoshani indicated last week that officials have plans for at least three more weeks of war.