Oil prices surge, stocks tumble after US-Iran clashes over Strait of Hormuz

Oil prices surged and stocks fell sharply after the United States carried out a fresh wave of strikes against Iran, escalating the standoff over the Strait of Hormuz. Brent crude, the global benchmark, rose 4.7% to $79.59 a barrel. Asian markets tumbled, with South Korea's Kospi index dropping 8%, while Japan's Nikkei 225 and China's Shanghai Composite each fell 2%.

Chipmakers were among the hardest hit. South Korea's SK Hynix plunged 15%, and rival Samsung Electronics slid 10%. The market turmoil followed US military strikes on Sunday evening, which prompted retaliation from Tehran.

US Central Command (Centcom) said on X that the strikes aimed to “continue degrading their ability to attack civilian mariners and commercial ships freely transiting the strait of Hormuz.” It added that President Donald Trump “has directed the strikes to hold Iranian forces accountable.” The strikes are the latest in a cycle of attacks as Iran seeks to assert control over the Strait of Hormuz, a critical waterway through which about a fifth of the world's oil normally passes.

The escalation has cast further doubt on the fragile US-Iran truce signed last month. Analysts at Goldman Sachs wrote that the attacks highlight how uncertain Gulf exports remain and that a serious re-escalation could reintensify short-term upside risks to oil prices.

Data from analyst Kpler showed that just six vessels crossed the strait on Sunday, the fewest in five weeks. Among tankers leaving the strait were the very large crude carrier Humanity, carrying 2 million barrels of Iranian oil, and the Capetan Andreas, with about 500,000 barrels of Kuwaiti oil products. Three empty tankers entered the Gulf to load oil. Most tankers switch off their transponders when crossing.

Trump said on Sunday the route was open for commercial traffic, though Iran claimed it had closed the strait after a vessel took an unauthorized route. Iran's Islamic Revolutionary Guard Corps said on Monday its navy stopped two ships in the strait on Sunday by shutting down their systems, but did not name the vessels.

Gold prices fell 1.5% to $4,060.36 an ounce on Monday as higher oil prices fueled fears that central banks might raise interest rates to combat inflation. Gold becomes less attractive when rates are higher since it pays no yield.