In the early hours of the morning London time, the market frenzy jolted Michael Brown from his sleep. With his phone on the bedside table, incessant alerts kept it buzzing almost non-stop: Brent crude surged past $100 per barrel; broke through $110; Nasdaq futures dropped 2%; the Nikkei index plummeted 5%.
As a senior strategist at brokerage firm Pepperstone, Brown got out of bed, switched on his computer, and began fielding a flood of calls from clients in Asia. He remarked, "There was already a sense of panic setting in."
This was Monday, the tenth day since the outbreak of war involving Iran, when investors suddenly grasped the severity of disruptions to Middle Eastern oil production. The panic drove crude prices up by more than 30% at one point, also waking Gerald Gan, Chief Investment Officer at Reed Capital Partners, at his home in Singapore. Some of Reed's clients faced substantial equity losses, and staff urgently sought guidance, calling him repeatedly before dawn, stating, "We need to protect the portfolio."
A tanker was set ablaze after an attack in Iraqi waters.
In the U.S. oil-producing regions, veteran commodity trader Dennis Kissler was dealing with a completely different issue. Many of his clients at BOK Financial Securities were executives from shale oil producers. As they watched crude prices soar in overnight trading, they grew increasingly eager to lock in these high prices. From the moment he stepped into his Oklahoma City office at 6 a.m. on Monday, orders poured in, and Kissler found himself handling three phone calls simultaneously. By noon, his voice was hoarse.
Over the past two weeks, the war has triggered extreme market volatility, including a record crash in South Korean stocks, a 68% surge in European natural gas futures within two days, and historic lows for the Indian rupee and Egyptian pound, leaving global investors on edge. Some made significant gains, while others suffered heavy losses; even prominent financial firms like PIMCO, Citadel, and ExodusPoint Capital Management were not spared.
Kissler noted, "There will always be casualties. In moments like these, if you lose focus or trade on the wrong side, you can lose a million dollars in two seconds."
What stunned traders was not just the speed of the swings but also the violent "whiplash effect." Markets would convulse on a single piece of news, even if it was incorrect—such as when U.S. Energy Secretary Chris Wright posted on Tuesday that a naval escort had guided a tanker through the Strait of Hormuz.
Just the day before, U.S. WTI crude futures nearly erased a 31% gain after former President Trump hinted the war might be nearing an end, marking the largest intraday reversal in at least four decades. The S&P 500 surged in the final hour, recording its biggest one-day gain in a month.
While tensions have eased slightly in recent days, unlike the brief crash triggered by tariff announcements a year ago, many in the market expect this extraordinary volatility to persist for weeks, if not months. They point out that a real war is far more unpredictable and harder to de-escalate than a trade war. Gerald Gan advised, "I’ve told all stakeholders to be very careful."
One of the most puzzling aspects of the sell-off has been the failure of traditional safe-haven assets—aside from the U.S. dollar—to provide shelter. From gold to the Japanese yen, Swiss franc, and U.S. Treasuries, assets typically seen as refuges during crises fell, as soaring energy prices rekindled inflation fears and pushed interest rates higher.
In Sydney, Raymond Lee, Chief Investment Officer at Torica Capital, had hoped to hedge risk by investing in U.S. Treasuries. When he saw oil spike and Treasuries fall again early Monday, he decided to cut losses, instructing traders to sell two-year Treasury futures contracts.
He concluded that the Treasury market had become almost an extension of the oil market, with yields moving in tandem with crude prices, and he preferred to stay out until stability returned. Lee said, "Trading rates is like trading oil, and I’m not an oil expert."
But Kissler understands oil.
As head of energy trading at BOK, he cut his teeth decades ago on the trading floors of the Chicago Mercantile Exchange. He lived through the oil price spikes triggered by the 1990 Gulf War and the Iraq War a decade later, and the market shockwaves remain vivid in his memory.
Kissler has traded through all the major oil shocks in recent years: the 2008 financial crisis, the COVID-19 pandemic, and the Russia-Ukraine conflict. He said none compared to the constant stream of client orders on Monday morning.
In the first week after the U.S. and Israel began strikes on Iran, oil prices rose about 30%, but as weekend reports painted a clearer picture of declining regional crude output, investor anxiety built rapidly ahead of Monday’s opening. Within minutes, WTI was up more than 10%.
With the Strait of Hormuz nearly shut down, the International Energy Agency estimated that around 8 million barrels per day would be removed from the market this month—what it called the "largest supply disruption in history."
Kissler reminded his traders that they must remain fully staffed at all times. His personal tip for such moments: drink less coffee and water to minimize bathroom breaks. "You never take your eyes off the screen."
Back in Singapore, Gerald Gan at Reed Capital followed a similar rhythm. He logged on at 6 a.m. and stayed glued to the screen until around 2 a.m. the next day.
Asia, heavily reliant on oil and gas imports from the Middle East to power its economies, saw some of the worst market crashes. Every spike in crude prices quickly raised inflation expectations, dampened growth prospects, and strained public finances, adding further pressure on markets.
Currencies in Indonesia and the Philippines, like India’s, fell to record lows. Five of the world’s ten worst-performing stock markets this month were in Asia. Few suffered more than South Korea’s KOSPI, which fell over 7% on March 3, followed by a record 12% drop the next day, before reclaiming some losses in highly volatile trading.
The South Korean stock market rout dealt a "heavy blow" to Gan’s portfolio, but he said clients gained significantly from his decision weeks earlier to buy oil heavily at around $60 per barrel.
Gan described the experience as a "roller coaster." He is braced for more weeks of turbulence. "This isn’t over yet."
Michael Brown, the strategist at Pepperstone in London, shares the same concern. He observed, "One minute you think, ‘Maybe we’re out of the woods, maybe there’s progress.’ The next minute the news flips, and all your positions are in the red. Back to square one."
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