Asian and New Zealand share markets experienced significant declines on Monday, triggered by escalating tensions in the Middle East and the resulting surge in global oil prices. The Australian Securities Exchange (ASX) 200 closed down 2.9 percent, marking its largest single-day drop since April of last year, even as the New Zealand NZX 50 fell by 3 percent. Japan’s Nikkei index suffered a more substantial loss, plummeting 6 percent.
The downturn coincided with a 25 percent spike in Brent crude oil prices, surpassing $115 a barrel, fueled by the closure of the Strait of Hormuz – a critical waterway for global oil supply. Iranian forces closed the strait following US-Israeli strikes on Iran on February 28, 2026, suspending all commercial shipping. Approximately 20 percent of the world’s oil passes through the Strait of Hormuz, according to the U.S. Energy Information Administration.
“I reckon the markets are starting to really speculate about how protracted this conflict is going to be in the Middle East,” said Mark Fowler, an investment advisor at Forsyth Barr. “And we’ve seen this enormous surge in oil prices.”
The disruption to shipping has already impacted major carriers. Maersk has suspended all transits through the Hormuz Strait and halted bookings for several countries in the region, including the UAE, Oman, and Saudi Arabia. MSC has declared an ‘Finish of Voyage’ for all Gulf-bound cargo, a particularly drastic measure, with 15 vessels currently trapped in the Gulf. CMA CGM has ordered all its vessels to shelter, and Hapag-Lloyd has also suspended all Hormuz transits.
According to the Hormuz Crisis Dashboard, approximately 3,200 ships, representing 4 percent of global tonnage, are currently idle in the Gulf region, and over 100 container ships are affected. Emergency surcharges of $1,500 to $4,000 per TEU (twenty-foot equivalent unit) are being levied by carriers.
Kiwibank economists anticipate further volatility and a larger market reaction in the near term. They noted that an immediate increase in inflation is “all but a done deal” due to the disruptions in oil, gas, and shipping, but cautioned that the potential damage to global and domestic growth cannot be ignored.
US President Donald Trump characterized the oil price increase as a “very small price to pay” for “safety and peace,” but analysts suggest the economic consequences could be far-reaching. The All Ordinaries index in Australia shed around $130 billion in value at one point during Monday’s trading, before partially recovering.
While energy stocks bucked the overall trend, with Yancoal, Karoon Energy, and Whitehaven Coal posting gains, the broader market remained deeply affected. Santos and Woodside also saw increases, becoming the only stocks within the top 20 to register positive movement. The situation remains fluid, with ship operators switching off transponders to avoid targeting, making accurate tracking difficult.
