Asia-Pacific markets are poised for losses on Tuesday as escalating Middle East conflicts, including missile launches from Yemen towards Israel, push oil prices higher, with U.S. crude surpassing $100 per barrel for the first time since 2022.
Geopolitical Escalation
- U.S. President Donald Trump threatened to destroy Iran's electricity plants, oil wells, and Kharg Island if the Strait of Hormuz remains closed and no peace deal is reached.
- The Iran war has entered its fifth week, with the Trump administration considering ground forces to seize Kharg Island, which facilitates 90% of Iran's crude exports.
- Shipping traffic through the Hormuz waterway has virtually halted since U.S. and Israeli strikes on Iran on February 28.
- Recent missile launches from Yemen towards Israel underscore the broader regional instability.
Oil Price Surge
- West Texas Intermediate (WTI) crude rose over 3% to settle just below $103 per barrel on Monday, crossing the $100 threshold for the first time since 2022.
- International benchmark Brent crude increased by 0.19% to close at $112.78 per barrel.
Asia-Pacific Market Impact
- Australia's S&P/ASX 200 fell 0.30% in early Asia trade.
- Japan's Nikkei 225 futures were at 51,010, compared to the previous close of 51,885.85, indicating a potential drop.
- Hong Kong Hang Seng index futures stood at 24,683, versus the last close of 24,750.8, suggesting losses.