Crude oil sees record jump as Iran war fears escalate

Risk aversion persists

Market sentiment remains weak after reports of intensified U.S.-Israel strikes on Iran. Risk-off sentiment increased as the Iranian Revolutionary Guards reportedly took control of the Strait of Hormuz, a key route carrying about 20% of global oil flows. The Group of Seven (G7) and the International Energy Agency (IEA) are considering releasing emergency oil reserves to control the record surge in crude oil prices. Former United States President Donald Trump also expressed dissatisfaction with Israels attacks on Iranian oil facilities. Weak U.S. employment data, rising fears of a global energy supply shortage, and caution ahead of major U.S. inflation data further pressured markets.

Over the weekend, strikes reportedly hit around 30 Iranian oil depots, followed by Iranian retaliation targeting oil facilities and water desalination plants. Israeli Prime Minister Benjamin Netanyahu, former President Donald Trump, and United States Secretary of Defense Pete Hegseth warned that stronger military action could still follow. Around 20 million barrels per day of the roughly 105 million barrels consumed globally pass through the Strait of Hormuz, which is now effectively closed. Exports from countries such as Iraq and Kuwait are slowing due to shipping disruptions, making supply replacement extremely difficult.

As per the latest U.S employment report, Nonfarm Payrolls (NFP) fell by 92,000 in February against expectations for a 55,000 increase, while the previous two months were revised down by 69,000. The unemployment rate rose to 4.4%, and labour force participation declined to 62.0%. Job losses were broad across services, manufacturing, healthcare, leisure, and goods sectors, while average hourly earnings increased 0.4% month-on-month. Markets are now pricing around 50 basis points (bps) of Federal Reserve (Fed) rate cuts by year-end.

EURUSD and GBPUSD slid, USDJPY rose

The stronger U.S. Dollar and rising energy crisis risks in Europe pushed EURUSD to the lowest level since November 2025, while GBPUSD also declined. USDJPY rose to a six-week high, ignoring mixed Japan data and hawkish signals from the Bank of Japan (BoJ).

AUDUSD, NZDUSD extend south-run, but USDCAD declines further

Risk aversion and a strong U.S. Dollar outweighed China‘s positive inflation data, putting downward pressure on AUDUSD and NZDUSD. Meanwhile, USDCAD fell for the second consecutive day to a one-month low, supported by strong crude oil prices, Canada’s key export, and cautious optimism ahead of this weeks Canadian employment report.

Crude Oil Surprises Buyers

Oil prices surged as buyers rushed to secure supply, rising nearly 30% intraday and holding around a 25% gain, marking the largest one-day jump on record and surpassing the April 2, 2020, rally in West Texas Intermediate (WTI) crude oil. Donald Trump stated that oil prices would fall rapidly if Iran abandons its nuclear weapons programme, which could provide a possible path to a ceasefire instead of earlier demands for “unconditional surrender.” Rising oil prices are also increasing Irans leverage as disruptions in the Strait of Hormuz place economic pressure on the U.S.

Cryptocurrencies consolidate losses, but equities stay weak

Major U.S. stock indices closed lower on Friday, pulling Asia-Pacific markets down on Monday. The Dow Jones Industrial Average fell 453.19 points to 47,501.55, the S&P 500 dropped 90.69 points to 6,740.02, the NASDAQ Composite declined 361.31 points to 22,387.68, and the Russell 2000 lost 60.27 points to 2,525.30. For the week, the Dow fell 3.01%, the S&P 500 2.02%, the NASDAQ 1.24%, and the Russell 2000 4.06%.

Latest moves of key assets

• WTI crude oil marked the biggest intraday jump on record by rising to $119.50, before retreating to near $105.00 by the press time.

• Gold remains modestly offered near $5,130, after facing the first weekly loss.

• The US Dollar Index (DXY) hit a six-week high before retreating to 99.30 as we write.

• Wall Street closed on a negative note, and the Asia-Pacific stocks drifted lower. That said, equities in Europe and the UK are down during the initial hour.

• Bitcoin (BTC) and Ethereum (ETH) both post more than 2.0% intraday gains, while rising to $67,500 and $2,000, respectively.

An interesting day ahead…

Markets will focus on the Western reaction to Middle East tensions and the record crude oil rally on Monday. U.S. inflation data and Iran war updates will be key for direction this week, while German factory orders, industrial production, and Eurozone Sentix Investor Confidence will drive intraday trading.

Predictions for top-tier assets

• Bullish Move Expected: Gold, Silver

• Further Downside Likely: USDCHF, BTCUSD, ETHUSD, USDJPY

• Sideways Movement Anticipated: USDCAD, Nasdaq, DJI30, USDCNH, AUDUSD, NZDUSD, US Dollar

• Slow & Gradual Fall Eyed: DAX, FTSE 100, EURUSD, Crude Oil, GBPUSD