Finance
Brent Crude Set for Record Monthly Gain; Asia Shares Falter as Iran War Rages
Published by Global Banking & Finance Review®
Posted on March 31, 2026
4 min readLast updated: March 31, 2026
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Brent crude is on track for its largest ever monthly gain—up nearly 60% in March—as geopolitical turmoil in the Middle East drives oil supply fears. Asian equities are falling sharply, with markets weighed down by inflation concerns and energy insecurity amid the Iran war.
Brent Crude Posts Record Monthly Rise; Asian Markets Tumble Amid Iran War
Market Reactions to Middle East Conflict and Economic Impacts
By Rae Wee
Oil Prices Surge and Asian Shares Plunge
SINGAPORE, March 31 (Reuters) - Oil prices on Tuesday were set for a record monthly rise while Asian shares were headed for their steepest fall since 2022, capping a tumultuous month as the war in the Middle East stoked fears of higher inflation and slower growth.
Bonds were headed for their largest decline in months, owing to the hawkish sea change in the global outlook for interest rates, while the dollar recorded its strongest gain in eight months.
A month into the war, investors continue to be whipsawed by a barrage of headlines as tensions and attacks between the U.S., Israel and Iran escalate.
Investor Sentiment and Market Volatility
"It appears markets have gone from just mechanically trading headlines ... into a little bit more of a fear mode, taking risk off the table," said Vishnu Varathan, Mizuho's head of macro research for Asia ex-Japan.
"That partly might have to do with the transition from earlier thinking that there's a good chance of Trump being able to control the timeline and/or your TACO trade, to now beginning to be concerned or fearing a more prolonged conflict."
US Policy and Market Response
Markets turned a little more upbeat after The Wall Street Journal reported that U.S. President Donald Trump told aides he is willing to end the military campaign against Iran even if the Strait of Hormuz remains largely closed.
U.S. futures reversed early losses, with Nasdaq futures up 0.34% and S&P 500 futures gaining 0.4%.
EUROSTOXX 50 futures rose 0.15% and DAX futures were up 0.26%.
Oil and Energy Market Performance
Still, Brent crude futures were up roughly 2% at $114.98 per barrel, taking their gains for the month to roughly 59%, the largest on record.
U.S. crude advanced 1.8% to $104.73 a barrel and was headed for a monthly rise of roughly 56%, the most in nearly six years.
Inflation Concerns and Economic Outlook
"I think inflation will be the bigger near-term concern for global markets," said Thomas Mathews, head of markets for Asia-Pacific at Capital Economics.
"But if oil prices don't fall back over the next few months, we will probably have to start thinking about growth too."
The higher-for-longer energy prices have meant more pain for Asia, which is highly reliant on energy from the Middle East.
Asian Stock Markets and Regional Performance
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.55% and on track for a monthly fall of more than 12%, the most substantial decline since September 2022. Japan's Nikkei was down 0.93% and was set to lose 12.6% this month, while South Korea's Kospi was headed for a monthly decline of more than 17%, the most since 2008.
Bonds and Currency Markets
Bonds Under Water, Dollar Is King
The threat of inflation has led investors to ramp up expectations for rate hikes across major central banks this year, which in turn hammered bonds.
The Federal Reserve is now expected to keep rates on hold this year, compared with more than 50 basis points worth of easing priced in prior to the start of the war.
Fed Chair Jerome Powell on Monday said the U.S. central bank can wait to see how the Iran war affects the economy and inflation, noting that policymakers typically look through shocks such as those from higher oil prices.
U.S. Treasury yields steadied on Tuesday, though the two-year yield was set to rise more than 40 bps for the month, its largest increase since October 2024.
The benchmark 10-year yield has similarly advanced about 37 bps in March, its largest monthly rise since December 2024.
Currency Movements and Safe Havens
In currencies, the dollar was headed for its biggest monthly gain since July, having emerged as one of the few safe-haven assets amid the war.
Against a basket of currencies, the greenback was set to rise roughly 2.9% this month. The euro, which last bought $1.1474, was headed for a nearly 3% monthly loss while sterling was down more than 2% in March.
The yen remained a whisker away from a 160 per dollar level and was last 0.1% weaker at 159.93.
Gold and Precious Metals
In precious metals, spot gold was up 0.6% at $4,538.07 an ounce.
(Reporting by Rae Wee; Editing by Thomas Derpinghaus)
Key Takeaways
- •Brent crude futures climbed nearly 60% in March, marking the biggest monthly gain on record, fueled by disruptions tied to the Iran war and Strait of Hormuz closure (tradingkey.com).
- •Asian equity markets are under pressure: MSCI Asia ex‑Japan index, Japan’s Nikkei, and South Korea’s Kospi are all set for steep monthly losses, as soaring energy prices heighten inflation worries and impede growth (apnews.com).
- •Fed Chair Powell emphasized the Fed is watching inflation carefully amid energy shocks, saying monetary policy has limited scope to address transient supply-driven price spikes (apnews.com).
References
- Brent Sets Largest Ever Monthly Gain, Could April Hit $150? How High Will This Middle East Conflict Push Oil Prices?
- War with Iran chokes flows of oil and natural gas, highlighting energy security risks for Asia
- Fed is watching energy price spikes, but Chair Powell says bank is limited in what it can do
Frequently Asked Questions about Brent crude set for record monthly gain; Asia shares falter as Iran war rages
1Why did Brent crude see a record monthly gain?
Brent crude prices surged due to escalating conflict in the Middle East, causing market fears of disrupted supply and pushing prices up by around 59% for the month.
2Why are Asian shares falling sharply?
Asian shares suffered their steepest drop since 2022 as concerns over higher inflation and slower economic growth grew amid the ongoing war in the Middle East.
3How has the Iran war affected global markets?
The war increased market volatility, triggered a risk-off sentiment, pushed up oil prices, hammered bond markets, and lifted the US dollar as a safe haven.
4What impact has the war had on bonds and currencies?
Bonds faced their largest decline in months due to rising rate hike expectations, while the dollar saw its strongest eight-month gain as a safe haven.
5Which Asian stock indices experienced substantial declines?
MSCI’s Asia-Pacific index fell over 12%, Japan’s Nikkei lost 12.6%, and South Korea’s Kospi saw a monthly decline of more than 17%, the sharpest since 2008.
