Major Asian indexes fell due to Trump's threat against Iran's energy infrastructure, with oil futures fluctuating amid global supply fears.
Stock markets across Asia Pacific regions dropped significantly on Monday in response to U.S. President Donald Trump's ultimatum to Iran. Trump warned that Iran must reopen the Strait of Hormuz within 48 hours or face the destruction of its energy infrastructure, as stated on his Truth Social platform.
Japan's Nikkei 225 index fell by 4 percent, while South Korea's KOSPI declined by 4.5 percent in early trading. In Hong Kong, the Hang Seng Index tumbled by about 2 percent, reflecting widespread investor concerns over potential disruptions to global trade and energy supplies.
Oil Prices React to Escalating Tensions
Oil futures for Brent crude initially rose more than 1.5 percent to exceed $114 a barrel before easing to around $112 as of 02:00 GMT. This volatility stems from fears of further interruptions to energy exports, as the Strait of Hormuz typically handles about one-fifth of global oil and gas shipments.
Iran has threatened to fully close the strait and launch attacks on energy infrastructure across the region if Trump's ultimatum is enforced. The waterway is currently seeing limited traffic from Chinese, Indian, and Pakistani-flagged vessels amid the ongoing U.S. and Israeli conflict with Iran, which began on February 28.
Australia's ASX 200 index dropped by approximately 1.6 percent, and New Zealand's NZX 50 fell by about 1.3 percent. Wall Street futures, including those for the S&P 500 and Nasdaq Composite, saw losses of around 0.5 percent in pre-market trading.
Trump discussed the situation with UK Prime Minister Keir Starmer on Sunday, agreeing that reopening the strait is crucial for global energy market stability. The ultimatum's deadline is set for 23:44 GMT on Monday, adding urgency to the escalating Middle East tensions.
The conflict has driven oil prices up by more than 50 percent since late February, with analysts warning of potential further increases if the strait remains closed, based on reports from the source.
