The stock market soars, gold prices surge, and the global market's big counterattack hides risks

Ask AI · What potential challenges does the global oil supply face behind the rising oil prices?

Southern Finance, 21st Century Business Herald Reporter Wu Bin Report

As the US and Iran released statements easing the conflict, risk appetite surged sharply, and global markets kicked off a major rebound.

On March 31, Eastern Time, the three major US stock indices jumped sharply, with each logging its biggest single-day gain since May last year. The Dow Jones closed up 2.49%, at 46341.33 points; the Nasdaq rose 3.83%, to 21590.63 points; and the S&P 500 rose 2.91%, to 6528.52 points. At the same time, gold prices surged, and international oil prices fell.

In the April 1 Asia session, stock markets in Japan and South Korea opened significantly higher; the South Korean Composite Index (KOSPI) rose 5.5% at the open; and the Nikkei 225 opened up 1.75%, with its intraday gain expanding further.

Bill Northey, Senior Investment Director at US Bank Wealth Management, analyzed that the capital markets are pricing in expectations that the conflict will end early or that a ceasefire will be reached. While details remain unclear, markets are searching for clues, hoping that energy transport through the Strait of Hormuz can resume to normal.

Pressure from soaring oil prices begins to emerge

According to data from price tracking service GasBuddy, on March 30, the nationwide average retail gasoline price in the US first exceeded $4 per gallon in more than three years. Data from the American Automobile Association (AAA) also shows that since early March, the average retail gasoline price across the US has increased by more than $1. Prior to this round of oil-price surges, the nationwide average retail gasoline price had been below $3 for three straight months.

As a “nation on wheels,” gasoline is one of the most frequently purchased consumer goods for American households. When oil prices rise, they quickly place enormous pressure on household budgets, and they are also a key factor influencing midterm elections.

According to CCTV News, on March 31 local time, US President Trump said the US would end its war with Iran within two to three weeks, adding that the move would help reduce the currently high energy prices. Trump said the US’s current goal is to “completely destroy Iran’s remaining military capabilities,” including missile facilities and related infrastructure, and said the US may “leave Iran within two to three weeks,” while also not ruling out the possibility of reaching an agreement through negotiations before that.

Meanwhile, on March 31 local time, Iranian President Pezeshkian stated that Iran is willing to end the war, but on the condition that its demands are met—especially receiving guarantees that it will not be subjected to aggression again.

Core issues remain unresolved

Although tensions have eased, the core supply problems of the Middle East conflict have not been resolved. Past back-and-forth incidents have served as a warning. Brent crude and WTI crude are still above $100 per barrel, indicating that there are hidden risks behind the global markets’ major rebound.

According to CCTV News, regarding the Strait of Hormuz issue, Trump said the US does not plan to continue taking on primary security responsibilities in the future, believing that shipping security should be handled by the countries using the route, including France.

After Iran blocked the crucial global oil transportation chokepoint, the Strait of Hormuz, Saudi Arabia rerouted most of its crude oil to be shipped out via Red Sea ports, including Yanbu, which to some extent alleviated the global crude oil supply disruption crisis caused by the US-Iran conflict.

Data from shipping data company Vortexa shows that over the past two weeks, as many as 4.6 million barrels of crude oil were loaded and shipped from Yanbu each day—more than three times the 2025 average. Compared with the roughly 15 million barrels per day of oil supply disruption globally after the closure of the Strait of Hormuz, this is only a drop in the bucket.

In an extremely sensitive global oil market, these 4.6 million barrels are enough to disrupt supply. If this key trade passage is choked off again, oil prices will rise further and regional fuel shortages will be exacerbated.

As the Houthis have entered the fray, risks in the key Red Sea shipping route, the Bab el-Mandeb Strait, have clearly heated up. Muyu Xu, a senior crude oil analyst at trade data and analytics company Kpler, said that if future Houthi attacks effectively result in the Bab el-Mandeb Strait being de facto blocked, Saudi Arabia will either prioritize supplying crude oil to nearby Europe—thereby reducing exports to Asia—or route crude oil over longer distances through the Suez Canal to send it to Asia.

She also expects that many regions in Asia will run through their existing inventories in April and start seeing crude oil shortages. “If Saudi crude oil cannot be obtained in time, it will only make the near-term supply-tight situation worse.”

Looking ahead, Eric Diton, President of The Wealth Alliance, warned that the market has not yet escaped danger. Ultimately, if we do not solve the oil supply problem, pressure will continue to build.