Asia markets slip on rising oil prices, U.S. Iran tensions

March 16, 2026 (MLN): Asia markets opened the week on a cautious note Monday as investors reacted to surging oil prices and rising geopolitical tensions between the United States and Iran, developments that have increased uncertainty in global financial markets.

Crude oil prices remained elevated after reports that the administration of Donald Trump is considering additional military action targeting Iranian energy infrastructure.

U.S. crude was trading around $98.7 per barrel, while international benchmark Brent Crude Oil rose 0.48% to about $103.7 per barrel.

The escalation follows U.S. strikes on Iranian military assets located on Kharg Island, a strategic facility widely regarded as the backbone of Iran’s oil export system.

Washington has warned that further attacks on energy installations remain possible if tensions continue to intensify, as reported by CNBC. 

The bank estimates that higher oil and gas prices could reduce global GDP growth by around 0.3% over the next year, while also raising headline inflation by approximately 0.5% to 0.6%.

The report also highlighted that surging natural gas prices may create additional inflationary pressure, particularly in Europe and Asia.

The economic impact could become significantly larger if shipping through the Strait of Hormuz, a critical global oil transit route, is disrupted.

Equity markets across Asia largely declined as investors weighed the geopolitical risks and higher energy costs.

Hong Kong’s Hang Seng Index slipped 0.3%, while mainland China’s CSI 300 Index fell 0.31%, despite stronger-than-expected economic data from China.

China’s retail sales increased 2.8% year-on-year during the first two months of the year, beating economists’ forecasts of 2.5% growth. However, the figure marked a slowdown compared with 4% growth recorded in the same period last year.

Meanwhile, China’s industrial production expanded 6.3%, exceeding market expectations of a 5% rise, supported by resilient external demand, particularly from European and Southeast Asian markets.

In Japan, the Nikkei 225 dropped 1.07%, while the broader TOPIX index declined 0.98%. South Korea’s KOSPI remained largely unchanged, although the tech-heavy KOSDAQ lost 1.72%.

Australia’s benchmark S&P/ASX 200 also edged lower, falling 0.44% amid cautious investor sentiment.

Despite the weakness across Asian markets, U.S. stock futures pointed to a modest rebound after a negative week on Wall Street.

Futures tied to the Dow Jones Industrial Average rose 153 points, or 0.3%, while S&P 500 and Nasdaq-100 futures both advanced about 0.3%.

During Friday’s session, major U.S. indices ended lower. The S&P 500 fell 0.61% to 6,632.19, leaving the benchmark roughly 5% below its recent peak.

The Nasdaq Composite declined 0.93% to 22,105.36, while the Dow Jones Industrial Average dropped 119 points to close at 46,558.47.

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