Oil Hits $100 as Strait of Hormuz Crisis Deepens: What an RBA Rate Hike Means for Your ASX Portfolio

In the fortnight since the Hormuz crisis erupted, approximately A$265 billion has been wiped from the ASX, with the index suffering its worst single-session fall since April 2025. The trigger: a coordinated attack on tanker traffic through the Strait of Hormuz sent Brent crude surging past US$100 a barrel for the first time since 2022. That shock arrived at the worst possible moment, just as RBA Governor Michele Bullock signalled that every rate meeting is "live." Three forces have converged in one week: geopolitical conflict, an oil price surge, and a hawkish central bank. Together, they are reshaping the ASX market outlook for 2026.

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The Oil Shock: What Happened and Why It Matters

The Strait of Hormuz is one of the world's most critical energy chokepoints, handling roughly 20% of global daily oil trade. When tanker traffic through this narrow, 33-kilometre-wide passage is disrupted, global supply tightens fast. 

Brent crude spiked to an intraday high of US$119.50 on 9 March, its most volatile week since the Gulf War. The International Energy Agency responded on 11 March with the largest coordinated emergency reserve release in history, making 400 million barrels available to stabilise markets. Prices have since eased to near US$100 as of 12 March, though physical supply risk remains firmly priced in. 

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The RBA's Pressure

Before the Hormuz crisis, markets had already sharply repriced the probability of a March rate hike, jumping from just 10% to above 33% in a single day following Bullock's AFR Business Summit comments, with money markets pricing in close to 70 basis points of total hikes across 2026. Oil above US$100 makes that decision significantly harder.

Energy costs feed directly into petrol prices, freight, and utilities, all components of Australia's CPI. Governor Bullock's signal at the AFR Business Summit on 3 March that every meeting is 'live' now carries real weight, with the next RBA decision due 17 March. The RBA faces a classic dilemma: tighten to contain energy-driven inflation and risk slowing an already fragile economy, or hold and risk inflation expectations becoming entrenched. Neither path is clean.

ASX Market Outlook 2026: Sector Winners and Losers

Not every ASX sector reacts the same way to this triple shock.

Energy Stocks: Near-Term Beneficiaries

Santos (ASX: STO), Woodside Energy (ASX: WDS), and Beach Energy (ASX: BPT) are the direct beneficiaries of elevated oil prices. Higher Brent prices lift revenue and free cash flow for domestic producers. Woodside earns primarily in US dollars, which provides an additional buffer when the Australian dollar weakens, a common side effect of global risk-off sentiment.

Rate-Sensitive Sectors: Under Pressure

Banks, REITs, and technology stocks all face headwinds. Higher rates compress property valuations, squeeze growth stock multiples, and increase borrowing costs for leveraged balance sheets, a combination that investors in rate-sensitive names need to watch closely.

Gold: Mixed Signals

Gold typically rallies on geopolitical uncertainty, but a hawkish RBA and a stronger US dollar can limit upside. Precious metals investors should watch for further RBA forward guidance before drawing firm conclusions.

Santos (ASX: STO): A Case Study in Both Directions

Santos illustrates the dual-sided nature of this environment. As one of Australia's largest oil and gas producers, it benefits directly when Brent trades above US$100. Higher oil prices lift revenue and free cash flow materially. Its LNG export revenues, priced in US dollars, also benefit from AUD weakness.

However, Santos carries meaningful long-term debt on its balance sheet. A rising rate environment increases future refinancing costs, a structural headwind that offsets some of the near-term upside. Investors will need to weigh strong revenue tailwinds against longer-term cost pressures before drawing conclusions about the stock's overall risk profile.

Investor Takeaway

Three things ASX investors should keep in mind right now:

• Energy stocks hold a near-term revenue tailwind, but oil gains could reverse quickly if the Hormuz crisis is resolved or diplomatic channels open.
• Rate-sensitive sectors face compounding pressure as energy-driven inflation strengthens the case for further RBA tightening, hitting banks, REITs, and tech hardest.
• The next RBA meeting is the key catalyst to watch, as any shift in forward guidance will likely trigger further sector rotation across the ASX.

This environment rewards preparation, not reaction. For a comprehensive view of which ASX stocks are best placed amid rising oil prices and a shifting rate outlook, download ASR's free Top-3 Stocks & Market Outlook Report, updated with current sector analysis and positioning guidance.

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