Asian Markets Fall as Oil Nears $100 Amid Iran War Concerns

BY COMFORT OGBONNA

Asian stock markets mostly declined on Friday as investors reacted to losses on Wall Street and continued uncertainty surrounding the ongoing conflict involving Iran, which has pushed oil prices close to $100 per barrel. Concerns about disruptions to global crude supply and rising energy costs weighed heavily on investor sentiment across the region.

In Japan, the benchmark Nikkei 225 index dropped 1.3% to 53,746.50. Technology shares were among the hardest hit, with major investment and tech conglomerate SoftBank Group sliding 4.7% as investors trimmed exposure to high-growth stocks amid market volatility.

South Korea’s KOSPI index also saw notable losses, falling 1.8% to 5,481.09. In Hong Kong, the Hang Seng Index declined 0.8% to 25,523.60, while mainland China’s Shanghai Composite Index slipped 0.6% to close at 4,105.40.

Elsewhere in the region, Australia’s S&P/ASX 200 edged down 0.1% to 8,617.10. Taiwan’s Taiex lost 0.5%, while India’s BSE Sensex dropped 0.9%, reflecting broader caution among investors across Asia-Pacific markets.

Despite the losses in Asia, U.S. futures indicated a possible rebound later in the day. Futures for the S&P 500 rose 0.2%, while contracts linked to the Dow Jones Industrial Average gained 0.3%, suggesting a potentially steadier opening for U.S. markets.

Oil prices remained elevated as geopolitical risks continued to dominate the global energy outlook. Brent crude, the international benchmark for oil prices, hovered close to $100 per barrel on Friday after briefly topping that level the previous day. Earlier in the week, prices surged to nearly $120 per barrel as tensions escalated in the Middle East.

Meanwhile, West Texas Intermediate crude, the main U.S. benchmark, fell 0.7% to $95.02 per barrel in early trading but remained significantly higher than levels seen before the conflict intensified.

The volatility in oil markets follows escalating tensions involving Iran. Iran’s new Supreme Leader, Mojtaba Khamenei, said in his first public remarks that the country would continue fighting and would keep using the strategic Strait of Hormuz as leverage against the United States and Israel.

The Strait of Hormuz is one of the most important maritime routes for global energy transport, with roughly one-fifth of the world’s oil supply passing through the narrow waterway each day. Shipping disruptions and attacks on vessels in or around the strait have already raised alarm among traders and governments worried about potential supply bottlenecks.

Analysts at Mizuho Bank warned that the situation could significantly affect global energy markets if tensions persist. They noted that continued attacks on ships and congestion in the shipping lanes could lead to prolonged disruptions in crude and gas deliveries.

The latest comments from Iran’s leadership came after U.S. President Donald Trump described the conflict as “very complete,” remarks that have fueled speculation about how long the tensions may continue and whether further escalation is likely.

Oil prices have swung sharply since the war began, reflecting uncertainty about supply stability. International Energy Agency attempted to calm markets earlier this week by announcing that its member nations would release a record 400 million barrels of crude from emergency reserves. However, some economists believe the move may not be enough to fully reassure investors if the conflict continues to threaten key shipping routes.

Rising energy costs are also raising concerns about global inflation. Higher fuel prices could increase production costs across multiple industries, from manufacturing to transportation. Some analysts warn that expensive energy could even raise costs for sectors such as artificial intelligence and semiconductor manufacturing, both of which require significant power and infrastructure investment.

The cautious mood in Asia followed a turbulent session on Wall Street. On Thursday, the S&P 500 fell 1.5% to 6,672.62, while the Dow Jones Industrial Average dropped 1.6% to 46,677.85. The tech-heavy Nasdaq Composite declined 1.8% to 22,311.98 as investors reacted to rising energy costs and geopolitical risks.

Companies that rely heavily on fuel faced some of the sharpest declines. Shares of cruise operator Carnival Corporation plunged 7.9%, while airline giant United Airlines fell 4.6% as investors worried about higher operating costs.

In commodity markets, precious metals also moved lower early Friday. The price of Gold slipped 0.5% to $5,099.40 per ounce, while Silver dropped 2.3% to $83.16 per ounce.

Currency markets showed modest shifts as the U.S. dollar strengthened slightly against the Japanese yen, rising to 159.39 yen from 159.34 yen. Meanwhile, the Euro traded at $1.1497, slightly weaker than its previous level of $1.1512.

With geopolitical tensions still high and oil markets extremely sensitive to developments in the Middle East, investors are expected to remain cautious in the coming days as they assess the potential impact on global growth, inflation, and energy supply.