- Asian stock markets bleed at the start of the week amid escalating Middle East conflicts.
- Iran vows indefinite Hormuz closure and attacks on regional infrastructure in response to Trump’s ultimatum.
- Saudi Aramco cuts crude supply to Asian buyers for a second month in April.
Stock markets in the Asian region have fallen like a house of cards at the start of the week as escalating conflicts in the Middle East, following United States (US) President Donald Trump’s ultimatum to Iran for reopening the Strait of Hormuz has further prompted energy supply concerns.
As of writing, Japan’s Nikkei 225 nosedives 3.75% to near 51,360, Shanghai plummets 2.23% to near 3,870, and Hang Seng plummets 3.3% at around 24,440. Meanwhile, Gift Nifty futures show that Nifty 50 will open over 350 points down to near 22,770.
Over the weekend, US President Trump warned complete destruction of Iranian energy facilities, starting with the biggest one, through a post on Truth.Social if it doesn’t fully reopen the Strait of Hormuz in 48 hours.
In response, Iran has vowed indefinite closure of the Hormuz and has threatened to target all infrastructure of energy, information technology (IT), and desalination facilities” in the region belonging to the US and Israel, The Politico reported.
Meanwhile, the response from the United Kingdom (UK) Prime Minister Keir Starmer during a call with US President Trump on Sunday, in which Starmer agreed that reopening the Strait of Hormuz is “essential to resume global shipping”, has increased hopes that the British economy could support America’s military activities soon.
Escalating Middle East conflicts have further squeezed the energy supply to the Asian region. Saudi Aramco, the world’s top oil exporter, cut crude supply to Asian buyers for a second month in April after the US-Israeli war with Iran disrupted trade via the Strait of Hormuz. This could elevate the burden on households’ spending by prompting input costs for companies.
Given that Asian economies are heavily reliant on oil imports to meet their energy needs. Higher energy prices are vulnerable to their economic prospects.
