HONG KONG: Oil prices surged and stocks sank Monday (Apr 13) after US-Iran peace talks fell apart and Donald Trump announced a blockade of the strategic Strait of Hormuz, adding to fears of energy supplies from the Middle East.
Oil prices – which tumbled last week after the United States and Iran agreed to a two-week ceasefire – jumped around 8 per cent Monday, with both contracts topping US$100 a barrel.
Equities fell across Asia, with Tokyo, Hong Kong and Seoul off at least 1 per cent, while Shanghai, Sydney, Singapore, Taipei and Jakarta were also down.
“The market is now largely back to conditions before the ceasefire, except now the US will block the remaining up to (2 million barrels) Iranian-linked flows through the Strait of Hormuz as well,” said MST Marquee analyst Saul Kavonic.
“The key remaining question is if the U.S. renews strikes on Iran, raising the risk of strikes on energy infrastructure across the region, which could have a further lasting impact beyond the duration of the war.”
In a lengthy social media post, Trump said his goal was to clear the strait of mines and reopen it to all shipping.
But he said that Iran must not be allowed to profit from controlling the waterway – through which a fifth of global oil and gas usually passes.
The US military said on Sunday it will blockade all Iranian Gulf ports on Monday at 2pm GMT (10pm, Singapore time), effectively seizing control of maritime traffic.
Iran’s Revolutionary Guards said its security forces had full control over the strait and warned enemies would be trapped in a “deadly vortex” in case of any “wrong move”.
Iran’s navy chief Shahram Irani called Trump’s threat “ridiculous and funny”, according to state TV.
https://www.channelnewsasia.com/business/us-iran-war-asia-stocks-markets-dollar-strengthens-6052331
