In brief
On Monday, Asian stock markets suffered significant declines as military tensions between Washington and Tehran intensified. Japan's Nikkei 225 dropped 3.4%, while South Korea's Kospi fell almost 5%. The conflict has severely impacted energy supplies, affecting countries reliant on oil transport through the Strait of Hormuz. Iran has threatened to target key infrastructure if US power plants are struck, raising fears of a wider energy crisis.
Major stock markets in Asia slumped on Monday after Washington and Tehran threatened to intensify hostilities, as the Iran war enters its fourth week. Japan's benchmark Nikkei 225 index was 3.4% lower in morning trade, while South Korea's Kospi fell by almost 5%. US President Donald Trump warned on Saturday that he would 'obliterate' Iranian power plants if Iran did not open the key Strait of Hormuz shipping route. Iran said it would respond to any such strikes by targeting key infrastructure in the region, including energy facilities. Japan and South Korea have been particularly impacted by the conflict, as they are heavily dependent on oil and gas that would normally pass through the strait.Iran has effectively blocked the Strait of Hormuz, one of the world's busiest oil shipping channels, since the US and Israel attacked the country on 28 February. About 20% of the world's oil and liquefied natural gas (LNG) usually passes through the waterway, and the war has sent global fuel prices soaring. On Monday, International Energy Agency chief Fatih Birol said that the war could see the world facing its worst energy crisis in decades. Speaking at the National Press Club in Australia's capital, Birol compared the current energy crisis to those of the 1970s and the impact of Russia's 2022 invasion of Ukraine. This crisis as things stand is now two oil crises and one gas crash put all together, he said.As tensions escalate, stock markets across the Asia-Pacific region reflected heightened anxiety. Hong Kong's Hang Seng was down by 2.5%, and the Taiwan Weighted Index lost 2%. In the broader context, global oil prices were mixed, with Brent crude lower at $112 a barrel and US-traded oil slightly higher at $98.57.
