Global Markets Slide As West Asia Conflict Fuels Energy Shock

By Wan Muhammad Aslah Wan Razali

KUALA LUMPUR, March 13 (Bernama) -- The escalating conflict in West Asia is reverberating across global markets, energy supplies and humanitarian conditions, with governments and institutions scrambling to respond to rising oil prices, security threats and widening displacement across the region.

Asian and global stock markets retreated as crude oil prices surged amid fears of prolonged supply disruptions linked to tensions around the Strait of Hormuz, while several countries moved to release strategic fuel reserves or secure alternative energy sources as humanitarian concerns deepened.

According to the German News Agency (dpa), Asian equities closed lower on Friday as rising crude oil prices unsettled investor sentiment.

Brent crude climbed more than one per cent to nearly US$102 per barrel amid concerns over supply disruptions despite a record emergency reserve release by the International Energy Agency (IEA). 

Regional markets broadly declined, with China’s Shanghai Composite dropping 0.82 per cent and Hong Kong’s Hang Seng losing 0.98 per cent.

Japan’s Nikkei fell 1.16 per cent amid worries that the war involving Iran could intensify energy supply pressures, while South Korea’s Kospi slid 1.72 per cent as geopolitical tensions and reduced expectations of US rate cuts weighed on investor confidence.

European and US markets also recorded losses at closing on Thursday, according to reports by dpa-AFX and Xinhua. 

Europe’s Stoxx 600 dropped 0.61 per cent while key indices in London, Frankfurt and Paris closed lower as investors reacted to rising oil prices and geopolitical uncertainty.

In the United States (US), the Dow Jones Industrial Average fell 1.56 per cent, and the Nasdaq declined 1.78 per cent as energy prices surged.

The US dollar hit a three-month high while investors awaited US inflation data for clues on interest rate policy.

Oil prices have climbed sharply following Iran’s decision to maintain the closure of the Strait of Hormuz, a critical global shipping route.

In his first public statement since taking power, Iran’s new Supreme Leader, Mojtaba Khamenei, said the Strait of Hormuz should remain closed to pressure Iran’s adversaries and warned that all US military bases in the region could become targets if they are not shut down.

 The disruption has triggered emergency responses worldwide, including a US plan to release 172 million barrels from its Strategic Petroleum Reserve and a coordinated release of 400 million barrels of emergency oil stocks by IEA member countries.

Australia has begun tapping its strategic fuel reserves for the first time since the Russia-Ukraine war in 2022. 

Its Energy Minister Chris Bowen said up to 762 million litres of petrol and diesel would be released to help ease supply disruptions and stabilise fuel markets amid the escalating conflict.

Thailand is also seeking alternative energy sources as it prepares for potential supply shortfalls. 

Thailand’s Deputy Prime Minister Phiphat Ratchakitprakarn said the country currently has oil reserves sufficient for about 98 days, while authorities are negotiating with suppliers outside the Gulf region and monitoring fuel prices and the impact of inflation.

Meanwhile, Xinhua reported that global nuclear power construction has reached its highest level in four decades, signalling renewed interest in the energy source amid geopolitical uncertainty. 

IEA Executive Director Fatih Birol said nuclear energy, alongside renewables, would remain a critical pillar of global clean and reliable power generation.

The conflict has also intensified humanitarian and security concerns across the region. 

The United Nations (UN) said more than 4.1 million people have been internally displaced across Afghanistan, Iran, Lebanon and Pakistan since the escalation began, while over 117,000 have fled abroad.

Anadolu Ajansi reported that China has announced emergency humanitarian assistance to Iran following a deadly airstrike on a school in the southern city of Minab that reportedly killed at least 150 schoolgirls during US-Israel attacks. 

Beijing condemned attacks on civilian infrastructure and pledged continued humanitarian support to affected communities.

Meanwhile, French energy major TotalEnergies has restarted production at Libya’s Mabruk oil field after a decade-long halt, with output expected to reach 25,000 barrels per day as part of efforts to expand global supply, according to dpa.

In a separate development, the United States has temporarily allowed countries to purchase Russian oil already in transit at sea to stabilise global energy markets shaken by the crisis, dpa and Sputnik/RIA Novosti reported. 

The authorisation applies to cargoes loaded before March 12 and will remain in effect until April 11.

As the conflict continues to intensify, governments and international organisations are racing to mitigate the economic and humanitarian fallout while global markets remain on edge over the prospect of prolonged disruption to energy supplies and regional stability.

-- BERNAMA