International oil prices recorded their largest intraday gain in four years after U.S. and Israeli strikes on Iran put the Strait of Hormuz—which handles 30% of global crude shipments—into a wartime state. Asian markets in Japan and Hong Kong weakened across the board but avoided the feared panic selling. Analysts warn that prolonged closure of the strait could accelerate oil price increases, dealing a direct blow to energy import-dependent economies in Asia and Europe.
On the New York Mercantile Exchange on April 2 (local time), Brent crude futures surged 13% immediately after opening, breaking through $82 per barrel. This marked the highest level since January last year and the largest single-day gain since March 2022, following Russia's invasion of Ukraine. Brent futures had already risen more than 20% this year amid escalating U.S.-Iran tensions. West Texas Intermediate (WTI) futures on NYMEX also jumped over 12% to $75.33 at the open, triggering a circuit breaker.
Asian stock markets opened with sharp declines of 1-2% but showed unexpected resilience. Japan's Nikkei index fell as much as 2.7% intraday before paring losses to close down 1.35%. Taiwan's TAIEX dropped 0.9%. Hong Kong's Hang Seng index fell as much as 2.51% before recovering to the low 2% range. China's Shanghai Composite closed up 0.47%, buoyed by refinery stocks hitting their daily limits and strength in commodities including gold and rare earths, as well as aerospace and defense shares. Asian markets performed relatively better compared to the AI bubble concerns in November last year (-2% to -3%) and the shock following Kevin Warsh's nomination as next Federal Reserve chair last month (-1% to -2%).
Cryptocurrencies including Bitcoin showed similar patterns. Bitcoin, which traded around $65,500 on February 28 just before the U.S.-Israeli airstrikes, plunged to $63,000 after hostilities began but rebounded to trade around $67,000 as of 2:30 p.m. on April 2, with heightened volatility.
Gold, the safe-haven asset, surged. International gold prices, which stood at $5,181 per troy ounce on February 27, exceeded $5,350 as of 2:30 p.m. on April 2. Wall Street analysts predict short-term preference for gold as well as the dollar and yen will increase. Goldman Sachs stated, "In an environment of spreading risk aversion and rising oil prices, the dollar and yen are likely to be the preferred safe-haven assets."
The market's immediate concern is inflation pressure following oil price increases. If the Hormuz Strait blockade extends, oil prices could likely surpass $100 per barrel. Goldman Sachs analyzed that if a complete blockade lasts more than one month, 20% of global liquefied natural gas (LNG) production would be stranded, potentially causing European and Asian spot gas prices to surge 130%. A blockade lasting more than two months could push European natural gas prices above 100 euros per megawatt-hour (MWh), triggering an energy crisis. The United States, as a net LNG exporter, is expected to be relatively insulated.
Net energy importers like South Korea and Japan are expected to suffer greater damage. The Nikkei's steeper decline compared to other markets including China is attributed to high oil price concerns. Rising energy prices add cost burdens across industries, while oil-driven inflation pressure reduces the likelihood of interest rate cuts, potentially eroding medium to long-term growth rates.
Wall Street estimates that if oil prices remain elevated at $80-90, real GDP in oil-importing countries including South Korea could decline by approximately 0.3-0.4 percentage points. According to Capital Economics, if Brent prices rise to $100 per barrel, global inflation could increase by 0.6-0.7 percentage points. NHK cited Yuki Togano, a researcher at Japan Research Institute (JRI), a private think tank, reporting that if oil prices surge to $120 due to the Hormuz blockade, Japan's GDP could fall by 3 percentage points.
Global financial investment circles including Wall Street predict that market corrections due to military conflict in Iran are unavoidable, given accumulated fatigue from market rallies. Japan's Nikkei, which saw relatively steeper declines, has risen 50% over the past year. The S&P 500's one-year gain of 17.6% is also substantial. Seo Sang-young, Managing Director at Mirae Asset Securities Research Center, said, "Stock markets will show short-term weakness as risk aversion spreads, with a shift toward safe-asset portfolios expected." He added, "Short-term volatility is unavoidable, and whether the situation prolongs and the actual duration of the Hormuz Strait blockade will be key in determining the future direction of financial markets."