Why is the closure of the Strait of Hormuz causing market volatility?

The Strait of Hormuz is a critical global shipping chokepoint responsible for the passage of one-fifth of the world’s oil supply. Iran’s decision to maintain a blockade after briefly suggesting a reopening has reignited fears of a supply crunch and a prolonged energy crisis.

How will the Strait of Hormuz blockade affect global oil prices?

Brent crude prices are expected to surge, likely reversing the 9% decline seen on April 17 that briefly brought prices down to US$90 per barrel.

What is the expected impact on the Australian share market (ASX:XJO)?

The S&P/ASX 200 is poised for a rocky start and significant downward pressure as investors retreat from riskier assets. While the broader market faces a sell-off, the energy sector may decouple from the index due to rising commodity prices.

Which Australian energy stocks could benefit from the oil price rally?

Domestic energy giants such as Woodside Energy (ASX:WDS), Santos (ASX:STO), and Beach Energy (ASX:BPT) are expected to see a short-term boon in share price performance.

Why is the Australian dollar falling despite high oil prices?

The Australian dollar is a "risk-sensitive" currency, meaning it typically loses value when global geopolitical tension rises and investors move capital into safe-haven assets like the US dollar or gold.

How does the Middle East conflict impact Reserve Bank of Australia (RBA) interest rate decisions?

The conflict increases the likelihood of a "hawkish" RBA, with markets now pricing in an 80% chance of a rate hike to 4.35% next month. Higher oil prices act as a massive inflationary shock, raising costs for transport and manufacturing.

What are the primary bear points for retail investors following this news?

The bear case focuses on "stagflation"—a scenario where economic growth slows due to high costs while inflation remains elevated. Sustained high oil prices act as a tax on consumers, reducing discretionary spending and hurting sectors like retail and aviation.

What should investors watch for in the coming days to gauge market direction?

The key signals to watch are official statements from Tehran regarding shipping permits and any retaliatory US diplomatic or military actions.

Image for illustrative purposes only. Not a real photo.

Oil spikes as Hormuz closure rattles global markets

Written by Brie CarterPublished Apr 19, 2026, 10:15 PM

Global markets are bracing for a volatile opening as the Australian share market prepares for a rocky start following Iran’s sudden reversal on the reopening of the Strait of Hormuz.

Despite initial optimism on April 17 that saw Wall Street hit record highs, Tehran’s decision to maintain its blockade of the critical shipping channel—citing continued US aggression—has reignited fears of a prolonged energy crisis.

With one-fifth of the world’s oil supply now back in the balance, Brent crude is expected to surge, erasing April 17’s 9% decline to $US90 a barrel.

National Australia Bank’s head of currency strategy, Ray Attrill, warned that markets have "no choice but to react badly", noting that the flow of oil remains the primary concern for investors regardless of formal peace talks.

While domestic energy giants like Woodside and Santos may see a short-term boon, the broader S&P/ASX 200 faces significant downward pressure.

The risk-sensitive Australian dollar is also predicted to retreat from its recent four-year high of 72.21 US cents as capital shifts towards safe-haven assets.

The escalation adds further weight to the Reserve Bank of Australia’s hawkish stance, with markets pricing in an 80% chance of a rate hike next month to 4.35% to combat oil-driven inflation.

Oil spikes as Hormuz closure rattles global markets

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Oil spikes as Hormuz closure rattles global markets

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