Asian markets on Friday saw a sharp decline following reports of fresh clashes between Iran and the United States in the Strait of Hormuz. All major indices were trading in the red due to renewed hostilities.
Besides the Nikkei 225, Taiwan’s Taiex and South Korea’s Kospi witnessed the sharpest declines after reaching record highs on Thursday.
The KOSPI benchmark, which began the day down 1.82 per cent, slid 163.99 points — a 2.19 per cent decline — to reach 7,326.06 by 9:15 am local time (00:15 GMT). Meanwhile, similar concerns were felt across all ASEAN member countries.
The grouping on Thursday issued a fresh statement saying that while the global oil crisis may stabilise eventually, the world will never be the same again, especially for ASEAN. The statement also noted that countries in the group must understand and navigate the changes in the global order and reconsider alliances after the Iran-US war exposed new geopolitical realities.
Every single member state in ASEAN has been affected by the global oil crisis, the statement further said. Although there are many approaches that they have taken.
For example, Singapore decided not to negotiate with Iran on passage through the Strait of Hormuz. The Philippines has been particularly affected because 98 per cent of its fuel supplies come from the Middle East.
On Friday, crude oil prices jumped back to $101 per barrel in the early hours after reports of fresh clashes between Iran and the United States rocked the Asian markets.
The geopolitical developments renewed concerns over global energy supply security and added volatility to commodity markets.
As of 20:05 ET (00:05 GMT), Brent Oil Futures climbed 2.1 per cent to US$103.37 per barrel, while WTI crude futures advanced 2.2 per cent to US$96.90 per barrel.
WTI crude futures were trading at US$95.85 earlier in the session, up 1.10 per barrel, with prices moving within a day’s range of US$95.57 to US$98.02. Brent crude futures were quoted at US$101.42, despite showing some intraday volatility.
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