Asia faces oil shock as US-Iran war chokes Strait of Hormuz

South China Morning Post · Mar 2, 2026 · Collected from RSS

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Oil prices surged by the most in four years on Monday as the killing of Iranian supreme leader Ayatollah Ali Khamenei amid a widening conflict between the United States, Israel and Iran brought tanker traffic through the Strait of Hormuz to a near standstill.Freight costs climbed sharply alongside crude, as traders swiftly priced in the war, which analysts say will have far-reaching consequences for Asia’s heavily import-dependent economies.Benchmark Brent crude jumped 13 per cent to a high above US$80 a barrel before settling around US$76 as of Monday morning in Hong Kong. West Texas Intermediate rose about 8 per cent to US$72 before easing to around US$67.The moves reflect both the immediate shock of Khamenei’s killing and deepening fears of a sustained supply disruption that could sharply inflate import bills for the world’s top energy consumers: China, India, Japan and South Korea among them.Iranian state media has confirmed that Khamenei was killed on Saturday morning by US-Israeli air strikes. Tehran responded with what analysts described as its most aggressive retaliation to date, striking US military bases in Bahrain, Kuwait and Qatar.“Iran has retaliated in a far more aggressive and expansive manner than in prior exchanges, targeting US military bases in the region and even conducting attacks on its key Gulf allies,” said Jorge Leon, senior vice-president and head of geopolitical analysis at Rystad Energy.