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Oil climbed and stocks fell again Monday as Middle East tensions kept building, with Yemen’s Houthis stepping into the Iran conflict and rising concerns that the U.S. could deploy ground troops—potentially going after Iran’s key oil hub, Kharg Island.
Brent crude rose to nearly $117 per barrel, while U.S. benchmark West Texas Intermediate moved above $100, with both gaining more than 3% during the session as the conflict entered its fifth week and concerns grew over possible direct U.S. involvement.
Tensions escalated further after Yemen’s Houthi forces said they had launched cruise missiles and drones targeting sites in Israel over the weekend. The development fueled concerns that the conflict could spill into another critical maritime route, the Bab el-Mandeb Strait, a key chokepoint linking Europe and Asia via the Red Sea and handling around 12% of global trade flows.
Saudi Arabia has reportedly rerouted a significant portion of its oil shipments through the Red Sea to avoid the Strait of Hormuz, which typically handles around 20% of global oil and gas flows but has been effectively shut by Iran, raising supply concerns.
Market anxiety has also been driven by remarks from U.S. President Donald Trump, who said in an interview that the United States could "take the oil in Iran" and seize Kharg Island "very easily."
Located off Iran’s western coast, Kharg Island serves as the country’s main oil export terminal. Reports indicate the Pentagon has considered potential ground operations targeting the site, although U.S. officials signaled that a full-scale invasion is not currently planned.
The spike in oil prices added pressure on global equity markets, with investors worried about renewed inflation risks and tighter financial conditions.
In Asia, Japan’s Nikkei 225 and South Korea’s Kospi both dropped more than 3%, while Hong Kong’s Hang Seng declined by 1%. China’s Shanghai Composite edged up 0.2%, diverging from the broader regional trend.
European futures also pointed lower, with Euro Stoxx 50 down 0.8%, Germany’s DAX off 0.7%, and the FTSE 100 slipping 0.3%.
Gold recovered from last week’s losses, rising 0.8% to around $4,530 per ounce. Silver gained 1.3% to reach $70, while palladium and platinum climbed about 3% to roughly $1,400 and $1,900 per ounce.
In cryptocurrency markets, bitcoin increased 1% to $67,260, while ethereum rose 2% to $2,040, continuing a volatile pattern of alternating gains and losses.
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