Equity indices across Asia declined on Thursday after oil prices soared, triggered by reports of additional tanker attacks in the Strait of Hormuz and Iraqi waters. The sudden spike in crude prices reignited concerns over inflation and global borrowing costs, weighing on investor sentiment.
Major regional stock benchmarks registered notable losses, with Japan’s Nikkei fell 1.16%, Australia’s ASX200 dipped 1.34%, Korea’s Kospi slipped 0.41%, Hong Kong’s Hang Seng Index decreased 0.37%, while the Shanghai Composite was near the flat line, rising slightly by 0.04%.
Oil markets responded sharply to reports of further maritime security incidents. U.S. crude futures surged 7.5% to $93.80 per barrel, erasing earlier declines, while Brent crude futures climbed 7.7% to $99.03 a barrel amid tightening supply concerns.
This market reaction followed reports that two fuel tankers in Iraqi waters were damaged by Iranian explosive-laden boats, according to Iraqi security authorities. An official stated that all oil port operations in the country had been halted. The incidents escalated after Iran intensified its attacks on shipping in the Strait of Hormuz and warned of the possibility of oil prices reaching $200 a barrel. On Wednesday, Iranian forces reportedly fired upon several vessels in Gulf waters that did not comply with their instructions.
Adding to the market volatility, the International Energy Agency announced plans to release 400 million barrels from its oil reserves—its largest release to date. The United States will contribute 172 million barrels to this effort starting next week, as part of the IEA’s coordinated action.
On Wednesday, Dow Jones fell 0.61% to 47,417.27 points, S&P 500 dropped 0.08% to 6,775.80 points, while the Nasdaq Composite gained 0.08% to close at 22,726.13 points.
