Bangkok — Japan’s benchmark Nikkei 225 index fell more than 7% early Monday, and other Asian markets also fell after oil prices rose to about $114 a barrel due to turmoil caused by the war in the Middle East, casting a pall on economies that rely heavily on crude oil and gas imported from the region.
The Nikkei fell just over 7% to 51,694.16 shortly after trading began. South Korea’s Kospi index fell 7.4% to 5,162.83 points, and stocks in Australia and New Zealand fell more than 3%.
Hong Kong’s Hang Seng Index lost 3.1%, and the Shanghai Composite Index fell 1.7%.
S futures contracts&The P 500 and the Dow Jones Industrial Average fell more than 2%.
The price of a barrel of Brent crude oil was traded at $114.11 per barrel, and the price of standard US crude jumped to $114.00 per barrel. Both were 20% higher than their closing prices on Friday.
Crude oil prices reached their highest levels since shortly after Russia’s invasion of Ukraine in 2022. Supply concerns have sent crude oil and gasoline prices soaring as the war ensnares major oil-producing nations and hampers exports from the Persian Gulf.
“The market woke up to the sound every big trader fears. The oil siren. And this time it wasn’t a polite chime. It was a siren,” Stephen Innes of SPI Asset Management said in a commentary.
Rising oil and gas prices, if they continue, could spill over into the global economy, further complicating matters for countries still adjusting to higher tariffs on exports to the United States under President Donald Trump.
Senior officials from Southeast Asian countries met this week in Manila, Philippines, to discuss ways to cope with the shock caused by rising energy costs.
These increases came after US crude prices rose by 36% and Brent crude prices rose by 28% last week. Oil prices rose The war, which has now entered its second week, has trapped countries and places of vital importance to the production and movement of oil and gas from the Arabian Gulf.
If oil prices remain above $100 per barrel, some analysts and investors say this could cause serious damage to the global economy.
On Friday, S&The P 500 index fell 1.3% after the report appeared US employers cut more jobs last month than they created and after oil prices rose to over $90 a barrel. The combination of a weak economy and high inflation is the worst-case scenario for investors because the Fed doesn’t have a good tool to fix both problems at the same time.
The Dow Jones Index fell by as much as 945 points before ending with a loss of 453 points, or 0.9%, and the Nasdaq Composite Index fell by 1.6%.
Early Monday, the US dollar, which maintains its status as a safe haven for investors bracing for uncertainty, rose against other major currencies. It traded at 158.67 Japanese yen, up 0.9% from Friday’s close. The euro fell to $1.1514, from $1.1618.