Oil prices surged more than 5% and Asian stock markets tumbled on Thursday after President Donald Trump vowed in a primetime address to pound Iran “extremely hard” for the next two to three weeks and “bring them back to the Stone Ages”.
More than a month after the US and Israel launched their first attacks, it remains unclear when the war will end. Nevertheless,in his first national speech on the conflict, Mr Trump declared that US military objectives in Iran had largely been met but signalled a fresh wave of intense strikes.
He added: “We are going to hit them extremely hard over the next two to three weeks. We’re going to bring them back to the Stone Ages, where they belong.”
He offered no fresh details on reopening the Strait of Hormuz – the vital chokepoint for a fifth of global oil supplies that Iran has effectively closed – and instead told dependent nations to “grab it and cherish it” themselves. The US, he insisted, no longer needed Middle Eastern oil. The remarks dashed hopes of imminent de-escalation, sending Brent crude jumping to over $106 a barrel and US crude above $104.
The fallout rippled across markets. Tokyo’s Nikkei 225 fell 1.4%, South Korea’s Kospi dropped 3.4% and Hong Kong’s Hang Seng lost 0.8 % in early trading. US futures pointed to further losses. Analysts described the speech as lacking any concrete exit strategy or plan to secure the strait, fuelling fears of prolonged supply disruptions.
In the UK, Energy Secretary Ed Miliband seized on the turmoil to renew his push for renewables. Mr Miliband said: “The events of recent days are yet another reminder that the only route to energy security and sovereignty for the UK is to get off our dependence on fossil fuel markets… and on to clean home-grown power that we do control.” Branding volatile oil and gas prices a “fossil fuel casino”, Mr Miliband warned against gambling on geopolitical stability in an unstable world.
Bob McNally, president of Rapidan Energy Group and a former White House adviser, called the situation a “five-alarm fire across the entire economy”. The absence of a US commitment to secure the strait was the main trigger for the price spike. Mr McNally asked: “If the US isn’t going to secure the Strait of Hormuz, who is?”
In Asia, the pain was immediate. South Korean President Lee Jae-myung urged lawmakers to approve a 26.2 trillion won (£14.5 billion) supplementary budget to cap fuel prices – reimposed for the first time in three decades – and hand out subsidies of up to 600,000 won (£330) to struggling households. Mr Lee said: “The crisis is not a passing shower, but a massive storm of unknown duration.”
Thailand saw diesel prices surge above 44 baht (£1.00) per litre after further subsidy cuts, the second sharp rise in a week. US petrol prices have already climbed past $4 a gallon for the first time since 2022, with analysts warning of knock-on effects for groceries and transport costs worldwide.
Democrats in Washington slammed the address as “incoherent”. Senator Mark Warner said Mr Trump owed Americans answers on a conflict driving up prices for diesel, fertiliser and essentials. Senator Chris Murphy added that no one knew whether the US was escalating or de-escalating.
Even those who once championed the President have turned critical. Former congresswoman Marjorie Taylor Greene, who has recently broken with the administration, slammed the focus on “WAR WAR WAR” while ignoring the “fuel crisis” hammering household bills. Ms Greene posted: “You can’t gaslight people and tell them that their bills are affordable.”
A New York think tank, the Soufan Center, accused Mr Trump of leaving Gulf Arab allies “in the lurch” by appearing ready to walk away from the strait while their economies depend on energy exports.
Takashi Hiroki, chief strategist at Monex, captured the market mood: investors had sought a clear timeline for de-escalation that never materialised. Mr Hiroki noted that instead, Mr Trump projected confidence that the war would “wrap up soon” even as he promised more devastation.
With global energy prices soaring and no immediate relief in sight, the speech has crystallised fears of a protracted economic shock. Whether Mr Trump’s aggressive posture accelerates a breakthrough or prolongs the pain remains to be seen – but for now, markets have delivered their verdict.