Asian Markets Drop Sharply as Strait of Hormuz Crisis Disrupts Energy Flows

Stock exchanges across Asia recorded substantial losses following the closure of the Strait of Hormuz and disruptions to regional energy supplies. The incident has led to immediate effects on financial markets and prompted international responses.

On 3 March 2026, concerns about conflict involving the US and Iran contributed to a sharp downturn in Asian equities. The closure of a key shipping route for oil and gas exports has affected both market confidence and energy availability in the region.

South Korea’s KOSPI index dropped by more than 7.2%, while Japan’s Nikkei index fell around 3.1%. Hong Kong’s Hang Seng index declined by roughly 1.1%, and the Shanghai Composite index decreased by about 1.4% during the same period.

The Strait of Hormuz, which typically handles about 20 million barrels of oil per day, has seen tanker traffic fall by approximately 70% since 28 February 2026 and then nearly cease. This disruption has reduced oil and gas exports through the strait to less than 10% of previous levels.

What the numbers show

• KOSPI fell over 7.2%, Nikkei dropped about 3.1% on 3 March 2026
• Brent crude oil prices peaked near US$126 per barrel in March 2026
• IEA countries agreed to release 400 million barrels from emergency reserves

The International Energy Agency stated that member countries would release 400 million barrels of oil from emergency reserves, marking the largest coordinated release in the agency’s history. This action was taken in response to the sharp reduction in global oil supply caused by the crisis in the Strait of Hormuz.

The executive director of the IEA said that the closure of the strait and related disruptions represent the greatest global energy security threat recorded to date. The agency’s statement highlighted the scale of the challenge facing energy-importing countries, especially in Asia.

According to media reports, countries in Asia are taking steps to conserve energy and shield consumers from the effects of oil and gas supply interruptions. These measures come as the region faces heightened exposure due to its reliance on imports passing through the affected waterway.

Global energy trade has been severely impacted, with Asia particularly vulnerable because of its dependence on shipments through the Strait of Hormuz. Market instability and supply constraints have prompted both governmental and institutional responses to address immediate risks.

* This article is based on publicly available information at the time of writing.