Oil prices skyrocket in Asia-Pacific region after Hormuz Strait closure

The Asia-Pacific markets opened sharply lower after news broke that the United States had launched airstrikes on Iranian nuclear sites over the weekend. The strikes, ordered by President Trump, came amid heightened tensions with Iran, following failed diplomatic talks and a series of military provocations in the Gulf. The closure of the Strait of Hormuz, a critical shipping route for global oil supply, added immediate pressure on the region’s energy markets.

Singapore’s Straits Times Index slid by 0.9% in early trade, while key banking stocks like DBS and OCBC experienced sharp declines. Over in Greater China, the Hang Seng dropped nearly 1%, and the CSI 300 in mainland China also edged down. Meanwhile, Japan’s Nikkei 225 and South Korea’s Kospi both posted losses exceeding 0.6%, showing how widespread the regional fallout was.

Oil prices responded almost instantly. Brent crude spiked more than 4% at the open, reaching levels not seen since January, before settling slightly above US$79 per barrel. US West Texas Intermediate (WTI) followed a similar trajectory. The dollar, as expected in such times, strengthened slightly due to its safe-haven appeal, rising against several Asia-Pacific currencies including the Singapore dollar.

The broader market reaction reveals deep concern over how far this geopolitical standoff may extend. The Strait of Hormuz sees about 20% of the world’s oil trade pass through its narrow waters. Any disruption here has serious global economic consequences, and the current situation is no exception.

Crypto Markets React Cautiously to Energy Uncertainty

As traditional financial markets absorbed the shock, the crypto sector showed mixed reactions. While some tokens correlated to commodities or labelled as “oil-linked” posted modest gains, the overall digital asset space remained cautious. Bitcoin’s price movement was relatively muted, suggesting that the market is still trying to assess the implications of rising energy costs and geopolitical instability.

Historically, geopolitical conflicts have triggered speculative spikes in certain tokens. Traders may recall previous attempts to launch oil-pegged stablecoins or energy-backed tokens during past Middle East conflicts. However, investors must approach such assets with a high degree of caution. 

Many of these tokens lack transparency and verifiable links to real-world commodities. In some cases, even the most basic documentation—such as whitepapers or company information—is either inaccessible or entirely missing from their websites.

Energy-related tokens claiming to benefit from oil price fluctuations often rely heavily on market hype, and not all are supported by credible backing or usage cases. Regulatory clarity in this area remains vague, and without oversight, the door is wide open for manipulation or false representation.

Crypto investors are advised not to jump into tokens merely because they are trending alongside oil price news. There are currently no universally recognised crypto assets that are formally pegged to global oil markets in a regulated or widely accepted manner. Speculative enthusiasm around oil-based coins should be balanced with thorough due diligence and risk assessment.

Read Also: Why is Trump Throwing the World and Crypto into Chaos?

Strait of Hormuz Closure Highlights Global Vulnerability

The closure of the Strait of Hormuz following the US military action has once again brought global attention to the region’s strategic significance. Iran, in retaliation, threatened US bases and hinted at further regional escalation. Iranian state media quoted senior advisers warning of "irreparable consequences" for any nation seen aiding the US in launching attacks.

The threat to the Strait has broader implications than oil alone. Roughly a fifth of the world’s liquefied natural gas (LNG) and nearly a third of seaborne crude oil pass through the Strait. A prolonged closure could send shockwaves through supply chains, transport costs, and inflation rates globally.

In such a climate, market uncertainty tends to benefit assets perceived as hedges—typically gold and, to a certain extent, Bitcoin. However, the crypto market remains young and fragmented, with its correlation to global events still inconsistent. 

Some investors have sought refuge in digital assets during previous conflicts, but the current crisis demonstrates the limits of this behaviour, especially when regulation and security of crypto platforms vary widely across jurisdictions.

This uncertainty is compounded by the emergence of obscure tokens capitalising on the conflict. There has been an uptick in social media chatter about new or previously unknown coins allegedly linked to oil, defence, or energy security. Several of these coins are backed by little more than a logo and a vague promise. Without a credible whitepaper, clear use case, or transparent team behind them, such coins pose serious risks to uninformed investors.

It is crucial to remain grounded. While the Middle East tension and Strait of Hormuz closure may lead to longer-term shifts in energy policy, investment strategy, and even blockchain applications in logistics or energy markets, the current crypto noise is largely speculative and lacks substance.

Read Also: What Happens If Iran and Israel Launch Nuclear Attacks? Experts Warn of Fallout

Conclusion

The closure of the Strait of Hormuz and the sharp spike in oil prices have sent ripples through the Asia-Pacific markets and cast fresh uncertainty over global economic stability. While some in the crypto community may attempt to tie digital assets to these developments, the reality is far more complex. 

Investors should remain cautious, especially when confronted with tokens that claim to benefit from geopolitical shocks without offering transparency or accessible documentation. Until there is regulatory clarity and verifiable backing, such assets are best approached with scepticism.

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Frequently Asked Questions (FAQ)

1. Why did oil prices surge suddenly in the Asia-Pacific region?

Oil prices jumped after the United States launched strikes on Iranian nuclear sites and Iran responded by closing the Strait of Hormuz, a vital energy route.

2. How are crypto markets affected by the rise in oil prices?

Crypto markets reacted cautiously. While some tokens claimed correlation with oil trends, most showed only limited movement. Speculative connections should be approached carefully.

3. Are there legitimate crypto tokens backed by oil or energy?

At present, most tokens claiming oil backing lack regulation or clear documentation. Investors should be wary of assets without accessible whitepapers or transparency.