On April 13, 2026, global financial markets opened the new week in a tense mood after peace talks between the United States and Iran in Islamabad ended without an agreement. This development immediately raised concerns that the already fragile ceasefire could deteriorate further, while the risk of disruption to energy supply from the Middle East escalated once again. As a result, crude oil surged sharply, the U.S. dollar strengthened, and global equities turned defensive.

Oil jumps on fears that supply cannot return to normal

The clearest market reaction was seen in oil. According to Reuters, Brent crude rose as much as 8% to $103 per barrel at one point early in the week, while AP reported that Brent increased 7% to $102.29 per barrel and U.S. WTI crude climbed 8% to $104.24 per barrel.

More notably, before the war broke out in late February 2026, Brent had been trading around $70 per barrel. After that, it had at one point climbed above $119 per barrel. This shows that the geopolitical risk premium built into oil prices remains very large and has not disappeared.

The core reason is not only the collapse of the negotiations, but also Washington’s announcement of a maritime blockade targeting activities linked to Iranian ports from April 13 onward. Although CENTCOM stated that vessels traveling between non-Iranian ports could still pass through the Strait of Hormuz, the move still heightened investor fears that energy flows through the world’s most critical oil chokepoint could remain constrained. Reuters also reported that some oil tankers had already begun avoiding Hormuz before the blockade officially took effect.

Why Hormuz matters so much to the entire world

The Strait of Hormuz is not simply a geopolitical flashpoint. It is one of the most important energy chokepoints on the planet.

According to the IEA, in 2025 nearly 15 million barrels of crude oil per day, equivalent to around 34% of global crude oil trade, passed through the Strait of Hormuz. If refined products are included, the total volume exported through Hormuz was close to 20 million barrels per day. The IEA also noted that around 80% of the oil and petroleum products moving through Hormuz were shipped to Asia.

Meanwhile, data from the EIA show that in 2024 and Q1 2025, flows through Hormuz accounted for more than one quarter of global seaborne oil trade and around one fifth of total global consumption of oil and petroleum products. In addition, about one fifth of global LNG trade also moved through this route.

What makes the situation more serious is the limited ability to reroute supply. The IEA estimates that Saudi Arabia and the UAE only have around 3.5 to 5.5 million barrels per day of alternative capacity available, which is far below the actual volume that normally passes through Hormuz.

In short, when Hormuz becomes unstable, the market is not just worried about Iranian oil exports. It is worried that the entire Gulf energy supply chain could remain distorted for a prolonged period, from shipping insurance costs and logistics to speculative pressure on oil prices.

The U.S. dollar rises not only on safe-haven demand, but also on inflation fears

Alongside oil, the U.S. dollar also strengthened noticeably. Reuters reported that the euro fell to around $1.1684, sterling dropped 0.5%, the Australian dollar declined 0.6%, while the U.S. dollar index remained near its highest level since April 7. The Japanese yen also weakened, with the dollar rising to around 159.8 yen.

There are two reasons behind this move.

First, the dollar is once again being bought as a safe-haven asset as markets return to a risk-off mood. Reuters cited Westpac, which said that early Asian trading clearly reflected investor caution after the U.S.-Iran negotiations failed.

Second, the sharp increase in oil prices revived concerns about inflation. That matters because rising energy costs can directly feed into consumer prices, transportation costs, and broader inflation expectations. Reuters noted that investors are beginning to reconsider the possibility that central banks such as the ECB and the Bank of England could lean back toward tighter policy, or at least maintain a restrictive stance for longer than expected before the conflict.

This has become even more important because only a few days earlier, after the announcement of a two-week ceasefire, the dollar had weakened as markets hoped geopolitical risks were easing. Reuters on April 10 also reported that U.S. CPI in March recorded its strongest increase in nearly four years, partly because the Iran conflict had pushed oil prices higher. In other words, if energy tensions continue, inflation pressure may no longer be just a possibility — it could become a new macroeconomic reality.

Equities fall, but there is no full panic yet

In the stock market, the reaction was defensive but still relatively controlled. S&P 500 futures fell about 1%, Japan’s Nikkei dropped 0.4%, South Korea’s Kospi lost 1.4%, and Australia’s ASX 200 slipped 0.6% early in the week. In the Middle East, Qatar’s stock market fell 0.1% and Saudi Arabia’s market declined 0.3%.

This suggests that investors are becoming more cautious, but they are not yet pricing in a scenario of complete collapse in regional energy flows.

That distinction is very important. The market is not reacting as though the war has already entered a fully uncontrollable phase. Instead, it is returning to a pre-ceasefire condition, meaning it is rebuilding geopolitical risk premium into oil, the dollar, and yields, while reducing appetite for risk assets.

Reuters quoted Saul Kavonic of MST Marquee, who said that the biggest question now is whether the United States will resume strikes on Iran, because at that point the risk would extend beyond Iranian supply and could spread to energy infrastructure across the broader region.

Gold falling is a notable signal

One surprising point for many investors is that gold did not rise alongside oil. Reuters reported that gold fell nearly 2% as investors took profits after its strong rally before the war.

This suggests that in the current shock, capital is favoring the U.S. dollar and energy assets more than precious metals. In other words, the market is trading more on the logic of energy shortage and inflation risk than on the logic of a traditional safe-haven rush.

What will determine the market’s next move?

The first factor is still diplomacy.

AP reported that neither side has clarified what will happen after the ceasefire expires on April 22, 2026, even though Pakistan, the EU, Oman, and Russia have all called for renewed dialogue. This is critical because the market still lacks a solid foundation for believing that tensions will ease in a durable way.

The second factor is the real operational situation in the Strait of Hormuz.

According to Reuters on April 10, during the first 24 hours of the ceasefire, only 1 product tanker and 5 dry bulk vessels passed through a route that had previously handled around 140 ship movements per day before the war. This indicates that even without a full closure, actual shipping activity remains far from normal.

The third factor is the risk of further military escalation.

Reuters said that The Wall Street Journal reported President Donald Trump and his advisers were considering the possibility of limited strikes on Iran. At the time of writing, there had been no confirmed reports of fresh attacks during Asian trading, but even the possibility alone was enough to keep markets on edge.

Source: Reuters