Oil prices rose sharply on Monday, with the dollar gaining strength after the United States launched attacks on Iran’s nuclear facilities over the weekend. Asian stock markets mostly declined, although Chinese equities saw gains as investors awaited Tehran’s possible response.
The U.S. strikes targeted three key nuclear sites in Iran, including Fordow, Natanz, and Isfahan, which are central to Iran’s nuclear program and missile capabilities. President Donald Trump declared the attacks “very successful,” stating, “Iran’s key nuclear enrichment facilities have been completely and totally obliterated.” He added, “NOW IS THE TIME FOR PEACE!” and congratulated American forces for their operation.
Iran, the world’s ninth-largest oil producer with about 3.3 million barrels per day output, exports nearly half of its production. The country has warned of retaliation and left open all options. Iran’s Foreign Minister Abbas Araghchi said the U.S. strikes “will have lasting consequences” and Tehran “retains all options” for response.
Oil prices initially jumped more than 4% on Monday, reaching their highest levels since January, before settling to gains around 1.1%. Analyst Ipek Ozkardeskaya noted satellite images suggest oil continues to flow through the Strait of Hormuz, a critical chokepoint for global oil shipments, which may explain the muted market reaction. She cautioned, “if things get uglier” U.S. crude could spike above $100 per barrel.
Economists warn that an oil price shock would negatively affect many Asian economies, which are major energy importers. Asian markets saw declines in Tokyo, Seoul, Sydney, and Jakarta, while Hong Kong and Shanghai rose. The dollar strengthened but analysts questioned the durability of this move, with Bloomberg strategist Sebastian Boyd saying, “If the increase proves to be just a knee-jerk reaction… the dollar’s downward path is likely to resume.”
Chris Weston of Pepperstone highlighted that Iran could cause significant economic disruption without closing the Strait of Hormuz, by raising maritime costs through perceived threats. Meanwhile, ongoing trade negotiations and Middle East tensions could further unsettle markets.
Key market figures as of Monday morning included Brent crude at $78.08 per barrel, WTI at $74.89, and mixed movements in major global stock indices.
