Asian stock markets slide after oil prices spike on Middle East conflict

Major Asian stock markets fell sharply Monday as oil prices surged amid escalating tensions in the Middle East. The price of West Texas Intermediate crude oil climbed above US$100 per barrel for the first time since 2022, while Brent crude jumped more than 17% to about US$109 per barrel, driven by fears of supply disruptions following halted activity in the strategic Strait of Hormuz.

The sell-off hit Kospi in Seoul particularly hard, with the index plunging more than 8%, triggering a temporary trading halt known as a circuit breaker by the Korea Exchange. The technology-heavy Kosdaq also dropped over 6%. In Tokyo, the Nikkei 225 fell nearly 7%, while the broader Topix index declined about 5.6%, as investors reacted to rising energy costs that could impact Japan’s import-dependent economy. Major automakers including Toyota, Honda and Nissan also recorded losses.

Markets across China and Hong Kong also declined, though more moderately, with the Shanghai Composite Index and Shenzhen Component Index falling up to 2.65% at the open. Southeast Asian markets were also under pressure, with sharp drops in Vietnam, Philippines and Thailand. Analysts note that Asia is particularly vulnerable to disruptions in the Strait of Hormuz, through which 84% to 90% of crude oil shipments and about 83% of liquefied natural gas exports are destined for the region.