Asia markets poised to open mixed as oil jumps on Iran tensions

Traders moved first in crude, then in currencies and equities, after Donald Trump rejected Iran’s response to a U.S. proposal aimed at ending the war. Brent crude jumped as much as 4.2% to $105.54 a barrel, West Texas Intermediate climbed above $99, and the U.S. dollar extended gains as investors priced in the chance that the conflict could last longer and keep energy flows under strain.

Trump called Iran’s reply “totally unacceptable” after saying the conflict with Iran was not over. The rejection hit oil because the market’s immediate concern is the Strait of Hormuz, the narrow shipping lane through which a large share of the world’s crude moves. Any prolonged disruption there would tighten supply, lift transport costs and feed through to gasoline, freight and broader consumer prices across Asia, where many economies rely heavily on imported energy.

Iran had sent its response to a U.S. proposal through mediator Pakistan, and the proposal reportedly would have opened shipping in the Strait of Hormuz and ended the U.S. blockade before nuclear talks were deferred. The conflict, now in its 10th week, has already damaged Iran and Lebanon, paralyzed maritime traffic in the strait and driven global energy prices higher. That backdrop left little room for relief buying in crude, even as some investors continued to bet that diplomacy could still return.

Asia’s market reaction was mixed, not uniform. South Korea’s Kospi hit a fresh record even as regional benchmarks were set to open unevenly, underscoring how a strong local equity backdrop can coexist with a sharp geopolitical oil shock. The immediate risk for investors is that higher crude prices could squeeze corporate margins and complicate central bank policy expectations if the jump in energy costs persists into the coming weeks.

Citi said the risks remained skewed upward for oil prices, a view reinforced by the speed of the latest move. For now, markets are treating the flare-up as a live supply threat rather than a short-lived headline shock, and that distinction will determine whether Asia’s opening wobble turns into a broader reassessment of inflation, earnings and risk appetite.