Oil Soars Above $100 As Trump Orders Hormuz Blockade, Markets Tumble

Global financial markets were jolted on Monday after oil prices surged sharply and stock markets declined, following a major escalation in tensions between the United States and Iran.

Crude oil prices jumped more than 8%, briefly crossing the $100-per-barrel mark, as investors reacted to the collapse of high-stakes peace talks held in Islamabad over the weekend. The negotiations, led on the US side by Vice President JD Vance, broke down after Washington accused Iran of refusing to halt its nuclear programme. Tehran, however, fired back, accusing the US of “maximalism” and constantly shifting its demands.

The situation took a dramatic turn after former US President Donald Trump announced a blockade of the Strait of Hormuz — one of the world’s most critical oil transit routes, responsible for roughly 20% of global oil and gas shipments.

Trump stated that the move was aimed at preventing Iran from benefiting economically from the waterway, adding that US naval forces would restrict ships linked to Iranian ports. The US military later confirmed plans to effectively take control of maritime traffic tied to Iran in the Gulf.

The announcement sent shockwaves through global markets. Major stock exchanges across Asia — including Tokyo, Hong Kong, and Seoul — recorded significant losses, while European markets in London, Paris, and Frankfurt also opened lower. The sudden spike in oil prices has reignited fears of rising inflation and economic instability worldwide.

Iranian officials were quick to dismiss the blockade threat. The country’s naval chief, Shahram Irani, described the move as “ridiculous,” while Iran’s Revolutionary Guards warned that any hostile action could trigger severe consequences, signaling the risk of further escalation.

Experts warn that even if diplomatic efforts resume, the damage to oil supply chains and production could take weeks or even months to stabilise. With millions of barrels of oil production already disrupted, energy prices are expected to remain elevated in the near term.

Beyond oil, the crisis is also fueling broader geopolitical concerns across the Middle East,

 with ongoing tensions involving Israel and Hezbollah adding to uncertainty in the region.

As global powers remain locked in a fragile standoff, markets are bracing for continued volatility, while the world watches closely to see whether diplomacy can still avert a deeper crisis.