Oil Surges as Trump Signals Tougher Stance on Iran – Asia Market Wrap

Oil prices surged while stocks and bonds declined after President Donald Trump warned that the US would strike Iran “extremely hard” over the coming two to three weeks, weakening expectations that the five-week Middle East conflict could soon end.

Brent crude climbed as much as 6.9% to trade above $108 a barrel as the fighting kept the Strait of Hormuz — a vital route for regional oil shipments — effectively closed, tightening supply. Trump said the waterway would reopen “naturally” once hostilities ease, though he offered no details or timetable.

Equities retreated after the president’s remarks interrupted a budding global rally, as investors worried that a prolonged conflict could keep oil prices elevated and weigh on economic growth. A regional gauge of Asian stocks dropped 2.2%, while S&P 500 futures slid 1.3%, suggesting the recent two-day rebound in global shares driven by hopes of easing tensions may fade. European markets were also set for losses of around 2% at the open.

Volatility across asset classes increased following the speech. The dollar strengthened, reinforcing its role as a safe haven during the conflict, while Treasuries declined amid concerns that higher energy prices could fuel inflation.

Before the address, optimism had grown after Trump said earlier that the US might bring the war with Iran to an end within two to three weeks. The tougher tone damped expectations for a swift resolution to a conflict that has already unsettled financial markets and pushed several stock benchmarks into correction territory as investors reduced risk exposure. During the nearly 20-minute speech, Trump did not outline any new policy direction toward Iran or provide further details on how military operations might proceed.