Asian Markets Plunge as US-Iran Tensions Spark Oil Price Surge

SEOUL — Asian stock markets tumbled on Sunday following a sharp spike in global oil prices triggered by escalating geopolitical tensions between the United States and Iran. South Korea's benchmark index fell more than 5 percent, leading regional declines as investors reacted to fears of supply disruptions in the Middle East.

The market sell-off was driven by Tehran's announcement that it has closed the Strait of Hormuz to commercial shipping while simultaneously expanding its missile attack operations against U.S. interests in the region. The closure of this critical waterway, through which approximately 20 percent of global oil consumption flows, sent crude futures soaring more than 3 percent within hours.

In Seoul, trading on the Korea Exchange saw heavy losses across energy-sensitive sectors and export-dependent industries as volatility swept through financial centers from Tokyo to Sydney. The Kospi index erased gains made earlier in the week, with automotive and semiconductor stocks leading the downturn amid concerns that rising fuel costs would dampen global demand for South Korean exports.

The crisis stems from a rapid deterioration of diplomatic relations between Washington and Tehran over the past 48 hours. U.S. officials have condemned Iran's actions as an act of aggression threatening international security, while Iranian state media framed the closure of the strait as a necessary defensive measure against American military pressure in the Persian Gulf.

The Strait of Hormuz remains tightly contested, with reports indicating that naval vessels from multiple nations are gathering near the entrance to assess the situation. No immediate timeline has been provided for when commercial traffic might resume through the chokepoint, leaving energy traders and policymakers uncertain about the duration of the disruption.

Oil prices have not seen such a rapid increase since major supply shocks in previous decades, prompting emergency meetings among finance ministers across Asia. Central banks are closely monitoring inflationary pressures that could result from sustained high fuel costs, with many analysts warning of potential ripple effects on manufacturing and transportation sectors globally.

While the United States has called for an immediate reopening of the strait to ensure free flow of commerce, Iran maintains its position until specific demands regarding regional security guarantees are met. Diplomatic channels remain active as world leaders seek a de-escalation path that could prevent further military engagement in one of the world's most volatile regions.

Investors await clarity on whether the current standoff will expand into broader conflict or if negotiated solutions can restore stability to global energy markets before Monday trading sessions begin across Asia.