LONDON – World shares mostly fell and oil rose again on Friday as investors digested Wall Street’s worst session since the start of the Iran war and reassessed the odds of a swift de‑escalation.
European benchmarks opened lower: Britain’s FTSE 100 slipped 0.3% to 9,939.96, France’s CAC 40 fell 0.7% to 7,718.97, and Germany’s DAX lost 1.3% to 22,314.28. In Asia, Tokyo’s Nikkei 225 closed down 0.4% at 53,373.07 and South Korea’s Kospi also shed 0.4% to 5,438.87 after paring sharper losses. Hong Kong’s Hang Seng rose 0.4% to 24,951.88 and the Shanghai Composite gained 0.6% to 3,913.72. Australia’s S&P/ASX 200 eased 0.1% to 8,516.30, while Taiwan’s Taiex fell 0.7% and India’s Sensex dropped 2.1%.
On Thursday in New York, the S&P 500 sank 1.7% to 6,477.16, its worst day since January, as the Dow Jones Industrial Average declined 1% to 45,960.11 and the Nasdaq composite tumbled 2.4% to 21,408.08-now 10% below its recent record in what investors call a “correction.” By convention, major indexes are considered in correction after a drop of at least 10% from a recent peak.
Shortly after U.S. markets closed, President Donald Trump said he was postponing a threatened strike on Iran’s energy infrastructure and extended until April 6 a deadline for Tehran to reopen the Strait of Hormuz, the narrow passage that handles a significant share of global oil and gas shipments. U.S. equity futures were little changed ahead of the Wall Street open Friday, suggesting investors are waiting for clearer signals from Washington and Tehran before taking on additional risk.
Energy chokepoint risk is dictating the tape
The market’s recoil reflects hard math around the Strait of Hormuz, rather than purely headline anxiety. In the first half of 2025, an average of roughly 20.9 million barrels per day transited the strait-about one‑fifth of global petroleum liquids consumption and roughly a quarter of seaborne oil trade. More than 20% of global liquefied natural gas also passed through the corridor, primarily from Qatar. Disruptions therefore transmit quickly to crude and gas prices, freight costs, and inflation expectations, forcing central banks and finance ministries to reassess their own inflation and growth forecasts.
While some Gulf barrels can bypass Hormuz, alternatives are limited. Saudi Aramco’s East‑West (Petroline) system to the Red Sea and the United Arab Emirates’ Abu Dhabi crude line to Fujairah together provide about 4.7 million barrels per day of routing capacity-well below normal Hormuz flows-leaving a structural shortfall if traffic is impeded. That gap is what markets are now pricing: even a partial or temporary disruption can tighten effective supply in a way that cannot be fully offset by rerouting alone.
The demand side is equally concentrated. In the first half of 2025, about 89% of the crude and condensate that moved through Hormuz was destined for Asian buyers, led by China, India, Japan and South Korea. For those importers, prolonged disruption risks fuel and power price spikes, weaker currencies and tighter balance‑of‑payments conditions. Policy makers from New Delhi to Tokyo are therefore watching the standoff as closely as traders in London or New York, with some preparing contingency measures ranging from fuel tax relief to the release of strategic reserves.
Diplomacy, maritime law and the policy backstops
Behind the market moves sits a dense web of rules and institutions. Under Part III of the United Nations Convention on the Law of the Sea, ships and aircraft enjoy a right of “transit passage” through straits used for international navigation-a legal regime designed to keep lifeline waterways like Hormuz open to uninterrupted traffic and to limit the ability of coastal states to choke off access in peacetime. In practice, tensions over interpretation and enforcement can still raise insurance premia, invite naval escorts and complicate commercial routing even short of a formal closure, but the treaty framework remains the reference point for most diplomatic démarches and statements of protest.
Regional security patrols also shape risk pricing. The U.S. 5th Fleet, based in Bahrain, routinely coordinates with partners to deter seizures and ensure navigation in and around Hormuz, including mine‑countermeasure and surveillance operations that help restore confidence to shippers and insurers when threats rise. Similar deployments in earlier Gulf crises helped limit outright blockages of tanker traffic even as military tensions escalated, and diplomats say current naval signaling is aimed at reinforcing that precedent.
If supply losses mount, governments have playbooks that sit on top of this security architecture. Members of the International Energy Agency maintain emergency oil stocks-typically at least 90 days of net imports-and have previously coordinated record drawdowns to cushion shocks, most notably a combined 182.7 million barrels in 2022 after Russia’s full‑scale invasion of Ukraine. Those mechanisms are designed to moderate price spikes and buy time for diplomacy, shipping schedules and domestic energy policies to adjust, even if they cannot fully offset a prolonged disruption in a corridor as central as Hormuz.
Across asset classes Friday, the flight‑to‑safety dynamic that typically accompanies energy‑security scares-selling in equities, gains in oil and demand for the safest government bonds-was in evidence as traders weighed negotiations between Washington and Tehran against the physical constraints at the world’s most sensitive energy chokepoint. As of Friday in Europe, U.S. equity futures were mostly unchanged, underscoring how closely market direction now depends on decisions taken in capitals rather than in trading rooms.
