Global financial markets reacted with a sharp surge in Asian equities during Wednesday’s early trading session, driven by an unexpected announcement from former U.S. President Donald Trump that American military forces will complete their withdrawal from Iran within two to three weeks — regardless of whether a diplomatic agreement is reached with Tehran’s government.
In early morning trading, Japan’s benchmark Nikkei 225 index climbed by nearly 4 percentage points, while South Korea’s primary Kospi index jumped more than 6%. Despite this significant upward movement, both major regional indexes remain below their pre-conflict levels, prior to the outbreak of the Iran war on February 28.
While equities gained ground, oil markets continued to edge upward: June-delivery Brent Crude, the global benchmark for oil pricing, traded 1.2% higher at $105.36 per barrel, equal to approximately £79.61. This uptick follows a historic monthly surge in May-delivery Brent during March, when the contract jumped 64% — its largest one-month gain in more than three decades. That spike came after Iran threatened to block all commercial shipping through the Strait of Hormuz, a critical chokepoint that carries roughly 20% of the world’s daily oil supply.
Speaking from the Oval Office on Tuesday, Trump told reporters that Iran is “begging to make a deal” to end the conflict, but added that reaching an agreement is “irrelevant” to the United States’ planned withdrawal timeline.
Hours before Trump’s statement, Iranian President Masoud Pezeshkian confirmed that his administration holds the “necessary will” to reach a negotiated end to the war, but outlined that Tehran requires concrete security guarantees to prevent future cross-border aggression from resuming.
For context, global oil pricing relies on monthly futures contracts, where buyers agree to purchase crude at a set price for future delivery. When futures prices rise, the increase is almost always passed through to consumers in the form of higher gasoline, diesel, and jet fuel prices, as oil is a core input for nearly all global transportation and manufacturing activity.
Goh Jing Rong, an energy markets analyst at Singapore Management University, explained that the March 2025 price surge was the largest single monthly jump for Brent crude since the 1990 Gulf War, when Iraq’s invasion of Kuwait removed both countries’ production from global markets and triggered a historic energy supply shock. Goh added that the current rally is driven overwhelmingly by market fear: the threat of a full shutdown of the Strait of Hormuz has created widespread anxiety over potential global supply disruptions.
“Prices have also been pushed up by growing concerns over rising insurance premiums for oil tankers traversing the region, and the vulnerability of other critical shipping waterways in the Middle East,” Goh added.
In recent days, the escalation of conflict has widened after Iran-backed Houthi militants in Yemen entered the conflict, raising new fears that the group could disrupt commercial shipping through the Red Sea, another key global trade route for energy and goods.
Ole Hansen, head of commodity strategy at Danish investment bank Saxo Bank, noted that another factor pushing prices higher is aggressive bidding from oil refiners, who are rushing to build inventory and boost production amid widespread global shortages of jet fuel and diesel. “Refiners are competing to lock in crude supplies to meet existing demand gaps, which is putting additional upward pressure on benchmark prices,” Hansen explained.
The current conflict has hit Northeast Asian economies particularly hard: both Japan and South Korea rely heavily on imported energy from the Middle East, leaving them more exposed to supply disruptions and price spikes than most other developed economies.