Global markets and oil prices reacted sharply on Monday, July 13, 2026, as intensified fighting in the Gulf led Iran to claim a closure of the Strait of Hormuz. Brent crude surged nearly 4% to $78.96 per barrel, while Asian stock indices, including the Nikkei and Kospi, recorded significant declines.
Gulf Conflict Drives Oil Price Spike
The escalation of hostilities in the Middle East has sent energy markets into a period of heightened volatility. Following an Iranian attack on a container ship in the Strait of Hormuz over the weekend—which left the vessel ablaze and a crew member missing—the United States launched multiple waves of retaliatory airstrikes through Monday morning.
The impact on global energy benchmarks was immediate. Brent crude reached $78.96 per barrel, a 3.9% gain, while U.S. benchmark crude oil rose 4% to $74.26 per barrel. Analysts noted that the recent surge reverses a cooling trend that had brought prices down to a recent trough of $70.14 for Brent crude.
Market consensus, via Euronext
Asian Equity Markets Under Pressure
The geopolitical instability triggered a sell-off across major Asian exchanges as investors moved toward safer assets. Japan’s Nikkei 225 index fell 1.1% to 67,786.86, while South Korea’s Kospi saw a sharper decline of 5.6%, closing at 7,060.69. The pressure was particularly acute in the semiconductor sector, which has recently served as a barometer for global AI-related sentiment.
For more on this story, see Hormuz Strait Traffic Flows Freely Despite Iran Claims.
SK Hynix, which experienced a surge in its U.S. debut last Friday after raising approximately $26.5 billion through the sale of American depositary shares at $149 each, saw its shares drop 10.6% in Seoul on Monday. Its competitor, Samsung Electronics, fell 6.7%. Market analysts at BofA expressed caution regarding the broader AI sector, noting that the heavy capital expenditure by hyperscalers—totaling $234 billion this year—is currently testing the limits of cash generation.
Monetary Policy and Earnings Outlook
The rise in oil prices has reignited concerns about global inflation, complicating the outlook for central banks. Higher energy costs could potentially delay the cooling of inflation rates, currently at 4.2%, and influence future interest rate decisions by the Federal Reserve. Investors are closely watching the upcoming week, which features testimony from Fed Chair Kevin Warsh before Congress and a heavy schedule of earnings reports from major U.S. financial institutions, including JPMorgan Chase, Citigroup, and Goldman Sachs.
This follows our earlier report, Middle East Live: Maritime Traffic Continues in the Strait of Hormuz.
Despite the volatility, some institutional analysts maintain a focus on long-term growth. Citi analysts noted that they remain overweight on global IT and the U.S. market, citing strong earnings momentum. However, they acknowledged that volatility may persist through the next quarter.
Market analysts via Euronext did not provide a specific reason in the source text for this volatility beyond the general AI context.
Government Pension Fund Moves and Currency Shifts
Currency markets also saw movement as the dollar index remained firm at 101.13. The Japanese yen faced pressure, adding 0.2% to 162.03 against the dollar, following recent suggestions by Japanese Finance Minister Satsuki Katayama that the $1.8 trillion Government Pension Investment Fund (GPIF) should repatriate more of its offshore investments. Taylor Nugent, a senior economist at NAB, noted that while such shifts could induce significant buying flow for the yen, the process is likely to be gradual.
Read also: Live Updates: Trump’s Iran Deal and Strait of Hormuz Reopening.
“It is worth noting though that while allocations can theoretically be reviewed any time, they tend to be slow moving, and the FY26 investment plan is already in place.”
Taylor Nugent, senior economist at NAB, via Euronext
As the week progresses, the market’s primary focus remains on whether the current conflict in the Gulf will escalate further. While U.S. officials reported that approximately 20 vessels had been escorted through the Strait of Hormuz in the previous 24 hours, ship tracking data has shown minimal traffic, leaving the status of the waterway as the central uncertainty for global trade.
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