Oil Prices

Asian stocks surged 0.7-8% with oil dropping below $100 as ceasefire hopes spread, but strategists warn the rally depends entirely on Hormuz reopening. Iran earns $139 million daily from oil exports during the crisis, creating financial incentives to prolong closure despite diplomatic pressure.

Brent crude's 60% surge to $104.63 since the Iran war began could persist even after fighting ends if the Strait of Hormuz remains unstable, according to Homin Lee at Lombard Odier. The strategist noted that 15 ships have passed through with Iran's permission, but sustained $100+ oil requires only the threat of closure, not active blockade. With 80% of Hormuz flows heading to Asia, energy-importing economies face prolonged stagflation risks that could outlast any military resolution.

Philippine inflation surged to approximately 3.8% in March, the fastest pace in 20 months, as oil prices climbed 40% month-on-month and the peso hit record lows near 61 to the dollar. The central bank warned inflation could breach the 4% target ceiling, with every $10 oil increase widening the current account deficit by 0.3-0.4% of GDP. The World Bank estimates household incomes could fall 3.3% if oil stays 60% above 2025 levels, threatening the Philippines' energy-import dependent economy as Middle East supply disruptions persist.

Saudi Aramco raised its flagship Arab Light crude price for Asian buyers to a record $19.50 per barrel premium above regional benchmarks, responding to Iran's near-closure of the Strait of Hormuz. The hike was lower than the $40 premium traders expected, but Brent has still surged over 50% year-to-date with 180 million barrels disrupted so far according to Aramco's CEO. OPEC+ agreed to raise output by 206,000 barrels daily starting May, but repairs to damaged infrastructure will be costly and time-intensive.

Asian stocks jumped over 1% and emerging market currencies strengthened on reports of US-Iran ceasefire discussions, with 15 ships reportedly passing through the Strait of Hormuz with Iranian permission. Thai shares led gains at 2.3% while crude oil pared earlier advances. Markets remain volatile: the MSCI Emerging Markets Index had wiped out all 2026 gains in March's sharpest monthly decline since 2020. US gasoline prices hitting $4.11 per gallon could push March CPI up 1%, the most since the post-pandemic surge.

Brent crude surged over 1% to above $111 per barrel as Trump's escalation threats offset reports of intense negotiations with Iran through multiple channels. US gasoline prices hit $4.11 per gallon, up 13 cents from last week and the highest since 2022. Eight OPEC+ nations agreed to boost May production by an undisclosed amount, but availability remains uncertain if the Strait remains blocked. Trump's zigzagging between war threats and peace talks is creating whiplash in energy markets, with one trader noting prices could easily spike above $120 if Tuesday's deadline passes without resolution.