The Stockholm stock exchange fell sharply at Monday's opening, with the broad OMXS index dropping 2.5 percent after just over 15 minutes of trading. This decline erased the entire year's gains for the Stockholm stock exchange, which had earlier this year been up as much as seven percent. According to SVT Nyheter, Maria Landeborn described that with declines during the morning, the entire year's stock market gain has been erased. The drop is due to rising oil and gas prices caused by the Middle East conflict, and the Stockholm stock exchange starts the week with sharp price declines on a broad front, in line with stock exchanges worldwide.
The week began with red stock market numbers in both Europe and Asia, with all companies on the OMXS30 in negative territory. European stocks fell sharply Monday, with the DAX index in Germany dropping 2.5%, the CAC 40 in France slipping 2.1% and the FTSE 100 in the U.K. falling 0.8%. Equity markets have fallen across the board, with indices in Asia and Europe in the red and futures pointing to weakness on Wall Street later in the session. U.S. stock markets stayed above zero yesterday, but futures trading points clearly downward ahead of the afternoon opening, after the U.S. and Israel attacked Iran over the weekend, killing several top officials, including Supreme Leader Ayatollah Ali Khamenei.
We have had a strong start to the stock market year. But with declines during the morning, the entire year's stock market gain has been erased.
Oil prices surged higher Monday after retaliatory Iranian attacks disrupted shipping in the Strait of Hormuz, with Brent crude priced at $106 per barrel as of Monday morning, up more than 40 percent from $72 per barrel on February 27. The surge in gas prices continues with an additional 30 percent up in morning trading after yesterday's reports that the giant gas facility in Qatar stopped its operations. According to Muyu Xu, a senior crude oil analyst at Kpler, liquified natural gas prices have risen by almost 60 percent since the start of the war. This affects electricity prices, which are rising even more on the financial markets, and prices of refined products have seen significant increases and are expected to continue rising if energy flows through the Strait of Hormuz remain largely shut.
According to the International Energy Agency, the de facto closure of the Strait of Hormuz and damage to regional infrastructure have produced the largest disruption to the global oil market in its history. Iranian attacks on vessels passing through the Strait of Hormuz have dramatically reduced traffic in the channel, through which about 20 percent of global oil and gas supplies transit, though other estimates suggest 25 to 30 percent of global oil and 20 percent of liquefied natural gas pass through. According to data from the US Energy Information Administration, about 84 percent of the crude oil and 83 percent of the LNG that passed through the Strait of Hormuz in 2024 was bound for Asia, with China, India, Japan and South Korea accounting for nearly 70 percent of oil shipments. Following the closure of the Strait of Hormuz on 4 March 2026, oil and LNG exports were stranded, causing Brent Crude to surge past $120 per barrel and forcing QatarEnergy to declare force majeure on all exports.
There is a risk that prices either fall back or that the price increase many expect this year does not materialize.
The war has caused a systemic collapse of the Gulf Cooperation Council economic model, with Arab states of the Persian Gulf as well as Iran itself relying on the Strait of Hormuz for their energy exports and grocery imports. The maritime blockade triggered a concurrent 'grocery supply emergency' across Gulf Cooperation Council states, which rely on the Strait for over 80% of their caloric intake, and by mid-March, 70% of the region's food imports were disrupted. This forced retailers like Lulu Retail to airlift staples, resulting in a 40–120% spike in consumer prices, and the crisis has shifted toward fears about a humanitarian crisis following Iranian strikes on desalination plants—the source of 99% of drinking water in Kuwait and Qatar. The regional aviation sector, including Emirates and Qatar Airways, faced a near-total cessation of operations due to multi-national airspace closures, causing widespread disruption to global air travel.
The United States-Israeli war on Iran and Tehran’s retaliatory strikes have upended global financial and energy markets, raising concerns of a global economic crisis or recession. The war in the Middle East is upending lives and livelihoods in the region and beyond, dimming the outlook for many economies, with large energy importers in Asia and Europe bearing the brunt of higher fuel and input costs. Parts of the Middle East, Africa, Asia-Pacific, and Latin America face higher food and fertilizer prices and tighter financial conditions due to the war, and low-income countries are especially at risk of food insecurity and may need more external support. The war could lead to higher prices and slower growth globally, with outcomes depending on its duration and spread, and the impact of the conflict echoes the 1970s energy crisis through acute supply shortages, currency volatility, inflation, and heightened risks of stagflation and recession.
The decline in oil shipments is logical given the uncertain situation.
The Brent crude oil price is on track for its biggest monthly gain on record in March after the Iran war caused mayhem in the markets, climbing by 51% since the start of March and beating the previous monthly record of 46% in September 1990. Brent closed at $112.57 a barrel on Friday, up from $72.48 a barrel on 27 February, the day before the US-Israeli war on Iran began, and traded as high as $119.50 a barrel during March, its highest level since June 2022. US crude prices also rose during March, with West Texas Intermediate gaining 48%, on track for its strongest month since May 2020, and oil prices climbed through the month despite the coordinated release of 400m barrels of oil from emergency reserves announced on 11 March. Oil was the best-performing asset during a volatile month for markets, in which shares, government bond prices and precious metals all fell, with losses on Wall Street during March pulling the Dow Jones industrial average into a correction, more than 10% below its record high.
Since the US-Israeli strikes on Iran began on February 28, Tehran has launched ballistic missiles targeting Israel, US military bases, oil depots, and other infrastructure across the Gulf region. Iran retaliated by launching strikes across several Middle Eastern countries and U.S. bases in the region, and the conflict showed few signs of ceasing, with U.S. President Donald Trump saying overnight that U.S. and Israeli military operations would continue and could last several weeks. The war between the U.S., Israel, and Iran has led to 21,000 canceled flights in the Middle East, stranding hundreds of thousands of travelers, and stocks fell despite Trump’s latest extension on planned strikes against Iran’s energy infrastructure, as investors anticipated prolonged disruption to oil from the Gulf.
The situation is serious in terms of its potential impact on energy prices.
Contradictions exist regarding the status of the Strait of Hormuz, with Iran having nearly closed the strait, causing oil prices to surge, yet Iran is exporting more oil through the Strait of Hormuz than before the conflict, implying it is open. The exact current status of the Strait of Hormuz—whether fully closed, partially open, or open with disruptions—remains unclear, affecting assessments of the global economic impact. Similarly, the start date and timeline of the war create confusion, with references to the '2026 Iran war' and the Strait of Hormuz closing on 4 March 2026 conflicting with reports that US-Israeli strikes began on February 28. The duration and potential escalation of the conflict are also uncertain, given conflicting reports on military operations.
Additional economic indicators show mixed signals, with the Swedish krona losing value against the dollar, which now costs 9.21, and the euro quoted at 10.72. The selloff in Europe comes after shares closed at a record high on Friday, logging their eighth straight month of gains after better-than-expected corporate updates, and the pan-European STOXX 600 registered its longest monthly winning streak since 2012-2013 on Friday. However, German retail sales fell more than expected in January, decreasing by 0.9% compared to the previous month, while British house prices rose 0.3% in February, leaving them 1.0% higher than a year earlier, according to figures from mortgage lender Nationwide Building Society.
This could have major economic consequences if it persists, but if the Strait of Hormuz reopens, it might not get much worse.
Interest rate reductions were expected to be postponed or increased in light of higher inflation caused by supply shortages and speculation, and stock markets experienced declines globally alongside a global bonds market sell-off. According to TV4 Nyheterna, Carl-Henrik Söderberg described that the situation is serious in terms of its potential impact on energy prices, and this could have major economic consequences if it persists. The White House is struggling to sell the image of a thriving U.S. economy, but fresh numbers point to the opposite, with the U.S. heading toward stagflation with increasing inflation in December, halved low growth in the fourth quarter, and unexpectedly weak job numbers. The full extent of humanitarian crises in the Gulf region and the long-term economic consequences for global markets remain unknown.
Oil companies are the big winners from rising oil prices.
Stocks sensitive to economic development are falling in value, causing people to move assets, such as from the stock market to gold.