Israeli Airstrikes on Iranian Nuclear Facilities Escalate Middle East Tensions: Changes in the Strait of Hormuz Cause Global Market Turmoil

On March 28, the situation in the Middle East intensified overnight. The Israel Defense Forces confirmed that they had launched airstrikes on two key nuclear facilities within Iran, including the heavy water reactor in the central province of Khondab and a uranium enrichment plant in Yazd province, stating that the aim was to continue weakening Iran’s nuclear capabilities. The Israeli military indicated that these facilities not only have the capacity to produce nuclear materials but are also significant economic assets for Iran. Previously, this heavy water reactor had been targeted in an airstrike in June 2025. In response, Iran took a hardline stance. The Islamic Revolutionary Guard Corps announced the closure of the Strait of Hormuz, prohibiting vessels associated with the U.S. and Israel from passing through, leading to several international cargo ships turning back. Iran also warned of potential retaliatory strikes against industrial facilities in Israel and several regional countries, while the Houthi forces expressed readiness to directly intervene in the conflict under certain conditions. Israel further signaled an escalation, with the Defense Minister stating that strikes against Iran would continue to expand, and operations had already begun targeting sites across Tehran. The U.S. maintained a relatively restrained position, stating that there were no plans for a ground invasion but anticipated that the conflict would last for 2 to 4 weeks. President Trump emphasized that Iran ‘must open the Strait of Hormuz,’ mistakenly referring to it as ‘Trump Strait’ at one point. Meanwhile, diplomatic currents in the region are shifting. According to Reuters, Qatar, Oman, and Kuwait are privately mediating to push for a ceasefire, while Saudi Arabia, the UAE, and Bahrain are preparing for an escalation of the conflict and have clearly opposed Iran’s continued use of the strait as a bargaining chip. Geopolitical risks are rapidly transmitting to global markets. Due to concerns over Middle Eastern supply, crude oil prices have risen above $100, spot gold has returned to the $4,500 mark, and the LME near-month aluminum contract premium has reached a historic high. U.S. stocks are under pressure, with the Nasdaq entering a technical correction zone from its recent highs, and all three major indices hitting new lows for the period. There is also uncertainty at the macroeconomic and policy levels: Fitch has maintained Israel’s ‘A’ rating but with a negative outlook; the U.S. Congress has fallen into a deadlock over Department of Homeland Security funding, increasing the risk of a government shutdown; and Russia announced a gasoline export ban starting in April, which may further disrupt the energy supply landscape. Currently, the Middle East conflict has rapidly evolved from ‘localized strikes’ to a high-risk phase of ‘regional games and global market linkage,’ with energy transport and commodity prices becoming core variables, and the future trajectory of the situation remains highly uncertain.