Global financial markets came under pressure on Monday as rising tensions between the United States and Iran triggered a sharp sell-off in stocks, while oil prices moved higher amid fears of prolonged conflict.

The escalation follows a 48-hour ultimatum issued by former U.S. President Donald Trump, demanding that Iran reopen the Strait of Hormuz—a critical route responsible for about one-fifth of global oil and gas shipments—or risk targeted attacks on its energy infrastructure.

The warning came as the Middle East conflict entered its fourth week, with no immediate resolution in sight. Iran responded by cautioning that the strait could be completely shut if the U.S. follows through on its threat, while senior officials warned of wider regional consequences.

The growing tensions have rattled investors worldwide. Major Asian markets, including Tokyo and Seoul, recorded steep losses, while Hong Kong, Shanghai, and other regional exchanges also declined significantly. The uncertainty has raised concerns about inflation, possible interest rate hikes, and disruptions to global supply chains, including food and fertiliser distribution.

Oil prices climbed amid fears of supply constraints, with Brent crude trading above $110 per barrel and West Texas Intermediate nearing $100.

The crisis has also drawn concern from global energy authorities. Fatih Birol, head of the International Energy Agency, warned that the situation poses a serious threat to the global economy and could lead to one of the worst energy crises in decades if it continues unchecked.

Market analysts say investors are closely watching developments, particularly as the deadline approaches, with attention shifting to the scale of any potential military action and Iran’s response.

Meanwhile, the conflict continues to expand, with Israel indicating that military operations in the region could persist for several more weeks, further heightening geopolitical and economic uncertainty worldwide.