Asian markets slide as US-Iran tensions push oil prices higher

Oil markets extended their upward momentum into a second consecutive day of gains following US military strikes on Iran, with Brent crude futures rising to US$95.34 a barrel. The price surge reflected investor concerns over potential disruptions to global energy supplies and the broader implications of heightened tensions in the Middle East.

The rally in crude prices weighed on Asian equity markets, as investors reassessed their risk exposure amid mounting geopolitical uncertainty. Higher oil costs pose inflationary pressures for energy-importing nations across the region, potentially complicating monetary policy decisions for central banks already grappling with economic headwinds.

Bond yields also climbed alongside crude prices, signalling a shift in market sentiment as traders repositioned portfolios in response to the escalating situation. The moves underscored how Middle East tensions continue to reverberate through global financial markets, affecting asset allocation decisions from Seoul to Singapore.

Analysts cautioned that sustained crude prices above US$95 could pressure margins for airlines and petrochemical producers across Asia, while potentially providing relief to energy exporters in the region. Market participants remain focused on the trajectory of US-Iran relations and any further developments that could impact energy markets.