Asian Stock Markets Plunge as Oil Prices Surge
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The Asian stock markets started the week with a sharp decline on Monday as the price of oil continues to rise, with WTI crude oil surpassing the $100 mark again.
The Tokyo Nikkei index lost over 5% in early trading, dropping 4.71% by 8:40 pm (EST). In Seoul, the Kospi fell by 4.2% as there is no sign of easing tensions in the Middle East, where the war has entered its second month.
“The ongoing tensions in the Middle East, with an uncertain outcome, continue to weigh on the stocks,” commented Keita Yamaguchi from Monex.
Shortly after the Asian markets opened on Monday, the WTI crude oil price for May delivery rose by 3.50% to $103.13 per barrel. Meanwhile, the Brent crude oil price, the international benchmark, increased by 2.98% to $115.93 per barrel.
The war in the Middle East, triggered on February 28 by an American-Israeli attack on Iran, shows no signs of calming down, and the information on this conflict is creating volatility in the markets.
The President of the Iranian Parliament accused the United States on Sunday of preparing a ground offensive, despite publicly advocating for a negotiated settlement, following the arrival of a US warship in the Middle East carrying around 3500 troops.
Mohammad Bagher Ghalibaf’s comments come after over a month of US and Israeli airstrikes on Iran, while regional key players were holding talks in Pakistan.
The conflict has spread across the region, with Iran retaliating with attacks on the Gulf states and the maritime route through the Strait of Hormuz, causing turmoil in energy markets and disrupting the global economy.
Iran still blocks the Strait of Hormuz, a strategic waterway through which a fifth of the world’s oil passes, leading to a significant energy shock.
Japan, the fifth-largest oil importer globally, heavily relies on Middle Eastern oil, with 94% of its oil supply coming from the region and 93% passing through the Strait of Hormuz.
