SINGAPORE, March 9, 2026, 22:30 SGT
Oil jumped to levels not seen since mid-2022 on Monday, with Brent spiking to $119.50 a barrel after the U.S.-Israeli conflict with Iran disrupted Gulf supply routes and clogged traffic through the Strait of Hormuz. Stocks tumbled from Asia through Europe, and Wall Street followed with a weaker open after Asia’s latest selloff. 1
This shift lands at a tricky moment, threatening to spark fresh inflation just as hopes for easing borrowing costs had started to build. Money markets quickly swung to price in possible rate hikes across Europe. IMF chief Kristalina Georgieva, for her part, cautioned that policymakers ought to “think of the unthinkable.” Her warning: if oil prices climb 10% and stay elevated most of the year, global inflation could jump by 0.4 percentage point. 2
Asian energy importers were slammed early, with the KOSPI in Seoul tumbling up to 8.8%. Indian stocks finished just above one-year lows. In Europe, the STOXX 600 slipped 1.8%. Both the S&P 500 and Nasdaq started the session in the red. 3
Supply tightened sharply. Saudi Arabia initiated curbs at two oilfields. Iraq cut its main southern output by 70%, down to 1.3 million barrels a day. Kuwait trimmed production as well. After an assault on its refinery complex, Bahrain’s Bapco invoked force majeure—a legal clause suspending contracts during severe disruption. 4
Tankers are barely moving through the Gulf now. Around the Strait of Hormuz, hundreds of ships sit idle, clogging the critical chokepoint that Gulf oil producers rely on to reach global buyers. “The market had all the ingredients for a ‘perfect storm,'” Kpler senior oil analyst Muyu Xu told Reuters. 4
The jolt wasn’t limited to oil trading. Airline stocks took a dive: Korean Air slid 8.6%, Air New Zealand lost 7.8%, and Cathay Pacific shed 5%. Fares ballooned, too—a Korean Air ticket from Seoul to London for March 11 soared to $4,359, up from just $564 the week before. 5
Subhas Menon, who leads the Association of Asia Pacific Airlines, warned that a 20% jump in crude often turns into an even sharper spike for jet fuel, thanks to tighter supply. That piles “significant cost” onto airlines already rerouting flights to avoid closed airspace. Deutsche analysts flagged that unless the situation improves, some of the weakest carriers could end up grounding planes. 5
Authorities are scrambling to contain the fallout. The International Energy Agency pushed for countries to jointly tap emergency reserves at a G7 gathering, while France mentioned that finance ministers will look at strategic stockpiles. South Korea’s President Lee Jae Myung set the country’s first fuel price caps since the 1990s. 6
But that relief might not materialize. Saul Kavonic at MST Marquee called the market “complacent” about just how deep and lengthy the conflict could run. JP Morgan, for its part, flagged the risk: a strike on Iran’s Kharg Island—hub for most of its crude exports—could choke off supplies in a flash and spark retaliation throughout the Gulf. 7
Last week’s wild moves underscored just how fragile sentiment is right now. After tumbling a record 12% in one session, the KOSPI snapped back almost 10% on March 5. But then came more selling pressure on Monday—traders appear to be bracing for an oil shock that could drag on, not just a short-lived scare. 8
