Energy prices spike while regional stocks fall sharply as conflict enters fifth week

Global oil prices surged and stock markets across Asia dropped sharply as the ongoing conflict involving Iran entered its fifth week, raising fears of prolonged instability in global energy markets.

The price of Brent crude oil climbed more than 3% to above $115 per barrel, while U.S.-traded West Texas Intermediate crude oil rose to around $103 after gaining roughly 3.5%. The latest rally puts Brent on course for what could become its largest monthly increase on record.

Financial markets reacted quickly to the heightened uncertainty. Japan’s Nikkei 225 dropped about 4.5% in early trading, while South Korea’s KOSPI fell around 4%, reflecting investor concerns about the potential economic impact of the conflict.

Tensions escalated further after Iran-backed Houthi movement launched strikes toward Israel over the weekend, signaling a widening of the conflict. Iranian officials have also threatened additional retaliatory actions, including potential strikes targeting universities and the residences of U.S. and Israeli officials.

Analysts warn that any disruption to major shipping routes or energy infrastructure in the Middle East could significantly affect global oil supply, particularly if the situation spreads to key transit points such as the Strait of Hormuz.

As the conflict continues with no immediate resolution in sight, markets remain highly sensitive to developments in the region, with energy prices and global equities likely to remain volatile in the weeks ahead.