Asian share markets moved lower on Thursday, breaking a two-day advance as crude oil surged toward the $100-per-barrel mark amid renewed disruptions to supply routes in the Middle East. U.S. stock index futures also eased during Asian trading hours, with the move noted at 02:38 GMT.
Oil spike tied to tanker attacks
Oil rallied more than 7% in early trading after reports emerged that two international oil tankers were attacked in the northern Persian Gulf, close to Iraq and Kuwait. The incident has been linked by Iraqi media channels to Iran, prompting concerns that the confrontation could widen and affect key energy corridors.
Reports of additional strikes on commercial vessels transiting the Strait of Hormuz - a critical global oil transit chokepoint - further supported the jump in crude prices. The rally pushed crude back toward $100 per barrel, after prices had at one point climbed to nearly $120 earlier in the week. Iranian warnings added to the risk narrative, with Tehran saying the world should prepare for oil reaching $200 per barrel if the conflict escalates.
Markets across Asia react
Japan's Nikkei 225 led losses in the region, falling 2%, while the broader TOPIX index slipped 1.6%. South Korea's KOSPI declined 1.1%, and Australia's S&P/ASX 200 dropped 1.7%.
Elsewhere in the region, China's Shanghai Composite edged 0.2% lower and the Shanghai Shenzhen CSI 300 dipped 0.6%. Hong Kong's Hang Seng fell 1.1%. Singapore's Straits Times Index was down 0.3%, and futures linked to India's Nifty 50 slipped 0.7%.
Policy and inflation concerns
Investors are cautious that a sustained period of elevated oil prices would add to inflationary pressures, complicating central banks' efforts to balance price stability with economic support. Market participants are looking ahead to Friday's release of the U.S. personal consumption expenditures price index, the Federal Reserve's preferred inflation gauge, for guidance on the likely path of U.S. monetary policy.
The crude rally came despite efforts by governments and global institutions to steady energy markets, underscoring the sensitivity of financial markets to supply interruptions in the Middle East.
Context notes
This report reflects market moves and reported incidents as described in available accounts. Where information is limited, the account above limits itself to reported developments and market reactions.