Asia-Pacific markets experienced a decline on Friday, largely fueled by rising oil prices and concerns over a potentially extended conflict in the Middle East, which could further disrupt energy supplies and trigger fears of a global economic downturn.
In a recent speech, Iran’s Supreme Leader Mojtaba Khamenei reinforced tensions, asserting that the Strait of Hormuz, a critical passage for global oil shipments, should remain closed. He also indicated that Iran could escalate its military involvement if the current conflict continues. This sentiment was echoed by Alireza Tangsiri, Commander of the Iranian Revolutionary Guard Corps Navy, who issued a warning of severe repercussions for adversarial nations via a social media post, emphasizing a readiness to deliver “the harshest blows.”
In the realm of U.S. economics, betting platforms such as Kalshi have seen an uptick in wagers, with the likelihood of a U.S. recession this year rising to 32%, marking the highest prediction rate for 2026. The increase in oil prices has also sparked discussions among analysts regarding its implications for the economy, suggesting that higher energy costs could contribute to economic stagnation.
On Thursday, the international benchmark Brent crude oil price spiked by 9.22%, closing at $100.46 per barrel—the first time it has surpassed the $100 mark since August 2022. Meanwhile, U.S. West Texas Intermediate futures surged 9.72% to settle at $95.73. Experts believe that oil prices may maintain their elevated levels in the short term as investors assess the risks associated with ongoing Middle Eastern tensions. Rob Thummel, a senior portfolio manager at Tortoise Capital, indicated a potential easing of prices towards the end of the year as the flow of oil through the Strait of Hormuz is likely to stabilize. Goldman Sachs projects Brent oil prices to average $98 per barrel in March and April—40% higher than in 2025—before potentially falling to $71 by the fourth quarter.
Amid rising prices, U.S. President Donald Trump attempted to downplay concerns by emphasizing that the U.S., as the largest oil producer globally, stands to gain from these developments. His administration has characterized the price surge as a “temporary disruption” while navigating strategies to curb Iran’s nuclear ambitions. Additionally, Treasury Secretary Scott Bessent announced that the U.S. would allow the temporary purchase of sanctioned Russian crude currently at sea, aimed at stabilizing the energy market.
In regional stock markets, Australia’s S&P/ASX 200 index fell by 0.3%, while Japan’s Nikkei 225 dropped 2%, with Honda Motor suffering a significant loss of over 6%, marking its first annual loss in nearly seven decades. South Korea’s Kospi saw a decline of almost 3%, and Hong Kong’s Hang Seng index slid by 0.2%. Conversely, mainland China’s CSI 300 index showed a slight increase of 0.3%.
In the United States, major stock indexes recorded their lowest closing figures of 2026, with the Dow Jones Industrial Average plummeting nearly 740 points, settling below 47,000 for the first time in the year. The S&P 500 and Nasdaq Composite also faced declines of 1.5% and 1.8%, respectively. Futures tied to the Dow edged down 0.03%, while S&P 500 futures rose by 0.21% and Nasdaq 100 futures increased by 0.12%. Investors are keenly awaiting critical U.S. inflation data, with economists predicting a year-over-year increase in the personal consumption expenditures price index of 2.9% and an acceleration in the core index to 3.1%.
