ISLAMABAD: Asian stock markets fell broadly on Thursday while global oil prices surged above $100 a barrel after reports of attacks on ships in Gulf waters and the shutdown of oil terminals raised fears of supply disruptions and rising inflation worldwide.
Both major oil benchmarks jumped nearly 9 percent. Brent Crude rose to around $100.22 per barrel, while West Texas Intermediate (WTI) climbed to about $95.41 per barrel.
The sharp rise in oil prices came amid escalating tensions in the Persian Gulf and the strategically vital Strait of Hormuz, following attacks on fuel tankers reportedly carried out by Iran-linked forces.
Despite efforts by the International Energy Agency to stabilize markets by announcing the release of 400 million barrels of oil from strategic reserves, investors remained cautious. As part of the plan, the United States said it would release 172 million barrels of oil starting next week.
Asian equities reacted negatively to the developments. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.6 percent, while Japan’s benchmark Nikkei 225 declined 1.5 percent.
In mainland China, blue-chip stocks slipped 0.6 percent, while Hong Kong’s Hang Seng Index dropped 1.2 percent.
Futures for the S&P 500 and Nasdaq also fell about 1 percent, indicating potential declines on Wall Street.
Market uncertainty intensified after reports that two fuel tankers in Iraqi waters were struck by explosive-laden boats allegedly linked to Iran. Iraqi authorities also said operations at the country’s oil ports had been completely halted.
Meanwhile, Oman reportedly evacuated vessels from its key oil export terminal at Mina Al Fahal as a precautionary measure.
Analysts warned the attacks could further disrupt global energy supplies and drive prices higher.
Iran has previously warned that ships passing through the Strait of Hormuz could face attacks, even suggesting oil prices could surge to $200 per barrel.
Adding to geopolitical uncertainty, Donald Trump said on Wednesday that the war against Iran had been “won,” but indicated that the United States would continue military operations until its objectives were fully achieved.
Inflation concerns grow
Economic data from the United States showed the Consumer Price Index rose 0.3 percent in February, slightly higher than January’s 0.2 percent increase, in line with market forecasts.
However, analysts said the data had limited impact on markets as the ongoing conflict with Iran was expected to drive global inflation higher through rising energy costs.
In bond markets, concerns over inflation pushed yields upward. Yields on 10-year U.S. Treasury notes rose to around 4.25 percent as investors anticipated tighter monetary conditions.
Traders also scaled back expectations for interest rate cuts from the Federal Reserve this year, while markets began speculating that the European Central Bank could consider raising interest rates as early as June.
Meanwhile, investors moved toward the safety of the U.S. dollar, while currencies of energy-importing countries such as Japan and many European nations weakened.