MARKETS: Asian stock markets in sharp decline – Goldman Sachs warns of a historic oil shock

In Asia, the stock market week started with a sharp decline.

Japan’s Nikkei was down 3.1 percent and the broader Topix was down 3.2 percent.

In mainland China, the CSI 300 was down 4 percent. Hong Kong’s Hang Seng was down 3.8 percent.

South Korea’s Kospi index was down 6.5 percent.

The US president is on the market’s nerves Donald Trump’s of the threat posed to Iran. Over the weekend, Trump gave Iran 48 hours to open the Strait of Hormuz, or the US threatens to destroy the country’s power plants. Iran responded that a possible attack would lead to a complete closure of the strait and strikes on US and Israeli energy infrastructure.

On the oil market, Brent was The price of Brent oil was around 113 dollars per barrel on Monday. The price of West Texas Intermediate oil, on the other hand, was 99 dollars per barrel.

Investment bank Goldman Sachs has raised its oil price forecasts for 2026 due to the closure of the Strait of Hormuz. The bank describes the situation as possibly the biggest supply shock in the history of the oil market.

According to Goldman analysts, the price of Brent oil is expected to average $85 per barrel this year, compared to a previous forecast of $77. The price of West Texas Intermediate oil, on the other hand, is expected to be 79 dollars instead of the previously forecast 72 dollars.

On Friday, the market began to price in the central bank Fed raising interest rates this year due to the inflationary threat posed by oil prices. The market is also preparing for similar interest rate hikes from other central banks, such as the European Central Bank.

The price of gold was down four percent on Monday at $4,360 per ounce.

At 8:27 a.m. one euro was worth 1.15 dollars, 183.9 yen, 0.86 pounds and 10.8 Swedish kronor. The dollar was 159 yen and the pound was 1.32 dollars.

A decline in the United States is expected on Monday based on index futures. A decline is also expected in Europe.