Monday was a bloodbath in Asian markets and a bonanza for oil traders. Brent crude hit $116.50 a barrel before settling around $114.85 — up 2% on the day and more than 50% higher than when the Iran war began five weeks ago. West Texas Intermediate rose 2.6% to $102.19.
The catalyst was Donald Trump’s weekend interview with the Financial Times, in which he said he wanted to “take the oil in Iran” and floated a military seizure of Kharg Island. He followed that on Monday morning with a threat to “completely obliterate” Iran’s energy infrastructure if the Strait of Hormuz is not reopened immediately.
Asian markets in freefall
Seoul was the worst hit. The Kospi plunged more than 5% in its steepest single-day drop since the COVID crash of 2020. South Korea imports virtually all of its oil and is acutely exposed to any further disruption in the Strait of Hormuz. The small-cap Kosdaq fell nearly 4%.
Japan’s Nikkei 225 lost 3.97% and the Topix shed 3.9%. Australia’s ASX 200 closed down 0.65%. European futures pointed to a mixed open, while US futures were slightly positive — buoyed by the logic that American energy companies benefit from higher crude.
Gold’s bizarre collapse
In one of the most counterintuitive moves of the crisis, gold has fallen nearly 15% for the month of March — one of its worst monthly performances in decades. The traditional safe-haven asset has been crushed by rising bond yields as investors reassess inflation expectations and bet that central banks will be forced to raise rates aggressively to contain energy-driven price surges.
The logic is brutal: if oil stays above $110, inflation stays above 4%, and if inflation stays above 4%, interest rates go up, and higher rates make gold — which pays no yield — less attractive than bonds.
Brent on track for record monthly rise
With one trading day left in March, Brent crude is on track for its largest monthly percentage gain in almost 40 years. The benchmark has risen from around $75 at the end of February to $115 today — a gain of more than 50% in a single month.
The last time oil moved this fast was January 1991, during the Gulf War. But that spike was short-lived. This one shows no sign of reversing. The Strait of Hormuz remains effectively closed, the Houthis have entered the war, and the US president is now openly threatening to destroy Iran’s oil infrastructure. Every escalation pushes the price higher. Every diplomatic failure locks it in.
For the global economy, the arithmetic is unforgiving. Every $10 increase in oil prices shaves roughly 0.3 percentage points off global GDP growth and adds 0.4 points to inflation. At $115, the world is paying a war tax of roughly 1.2% of GDP — and the bill is still climbing.