Quick overview

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Iran has reaffirmed its control over the Strait of Hormuz, while the United States seeks ways to mitigate the war’s impact on global trade. Brent Crude, Europe’s benchmark, briefly approached $120 per barrel.

Global markets have entered a deeper phase of तनाव one month into the outbreak of hostilities in the Middle East, in what increasingly appears to be a prolonged conflict. Over the past four weeks, oil prices have surged while risk assets have moved into negative territory, amid mounting uncertainty and fears of sustained disruption to energy supply.

Brent has climbed 55.31% to trade around $112 per barrel, with peaks near $120. Meanwhile, WTI Crude has gained 48.67%, hovering near $100—levels not seen since mid-2022. Natural gas has followed suit, rising more than 70% to €54.155 per megawatt hour.

Market impact

The rally reflects a combination of factors tied to the conflict involving the United States, Israel, and Iran: attacks on key infrastructure, risks to strategic routes, and growing expectations that the war could drag on. The result has been sustained upward pressure on energy prices, directly feeding into inflation expectations.

Equity markets have reacted accordingly in recent weeks. In Europe, major indices posted sharp monthly losses: Spain’s IBEX fell 8.49%; Frankfurt dropped 11.8%; Paris declined 10.24%; London lost 8.64%; and Milan fell 8.11%. In Asia, declines were also significant: Seoul dropped 12.9%, Tokyo 9.31%, and Hong Kong 5.53%.

Wall Street was not immune. The Nasdaq Composite led the losses with a 16.07% decline, followed by the Dow Jones Industrial Average (-7.82%) and the S&P 500 (-7.42%).

At the sector level, cyclical segments have been hit hardest. In Spain, consumer stocks, banks, and commodity-linked companies led declines, along with tourism and airlines. By contrast, the oil rally has boosted energy firms, while renewables have posted more modest gains.

Strait of Hormuz: current situation

Amid escalating tensions in the Strait of Hormuz, Washington maintains that communication channels with Tehran remain open, although Iranian authorities continue to deny formal negotiations. In this context, President Donald Trump extended until April 6 the ultimatum for Iran to reopen the strategic passage, through which roughly 20% of global crude exports flow.

The warning remains clear: absent progress, the U.S. is considering strikes on Iranian energy infrastructure. At the same time, the White House has sought to project signs of de-escalation. Special envoy Steve Witkoff stated that “ships are moving” through the strait, interpreting this as a sign of partial normalization.

Trump reinforced that view during a cabinet meeting: “To give you the facts, eight large oil tankers passed through the middle of the strait two days ago, fully loaded with crude,” he said, adding that “two more followed,” which he framed as a signal that Iran may be seeking an off-ramp to the conflict.

However, conditions on the ground remain far from stable. On Friday, the Islamic Revolutionary Guard Corps reported intercepting three vessels attempting to cross the strait and hardened its stance by banning ships linked to countries allied with the United States and Israel.