Asian shares slide as oil stays elevated near $100

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Asian shares slide

Highlights

Oil prices remained close to $100 a barrel despite US issuing a 30-day license for Russian oil.
Asian stock markets declined, with the MSCI Asia-Pacific index down 1.5% for the week.
The US dollar strengthened as a safe-haven currency, rising by 2% since the onset of the US-Israel-Iran conflict.
Inflation concerns persist due to high oil prices and regional tensions, affecting global market sentiment.

Oil stays elevated despite temporary license

According to Reuters, by the end of the Asian session, Brent was trading around $99.85 a barrel, while WTI stood near $95.05. Although prices edged lower earlier in the day after the US decision to issue a 30-day license for purchases of some Russian cargoes, the market did not see it as a reversal of the trend: the measure applies only to oil already loaded on tankers and stuck at sea.

The main driver remains geopolitical. About 20% of global oil flows pass through the Strait of Hormuz, and any disruption in that corridor is quickly reflected in crude prices. Brent has already risen above $100 this week and had previously approached $120 amid concerns over supplies from the Persian Gulf.

Asian stocks decline, dollar strengthens

Asian stock markets extended losses on Friday, following Wall Street lower. The broad MSCI Asia-Pacific index lost about 0.5% during the session and was on track for a weekly decline of roughly 1.5%. Japan’s Nikkei 225 fell 1.1%, South Korea’s Kospi dropped 1.3%, and Taiwan’s market lost nearly 2%.

At the same time, the dollar strengthened: since the war began at the end of February, the U.S. currency has gained about 2% as investors once again turned to it as a safe haven. Rising oil prices also intensified inflation concerns, leading markets to sharply scale back expectations for Federal Reserve rate cuts this year. That added further pressure on equities, especially in economies dependent on imported energy.

Expensive energy returns as the main risk

The current picture for markets looks difficult: oil remains near the psychologically important $100 mark, Asia is ending the week in negative territory, and the dollar continues to rise.

Even the temporary easing of restrictions on Russian oil did not change the broader risk assessment, because it does not remove the threat of larger disruptions in the Middle East.

If energy prices remain at current levels, that will increase pressure on inflation, complicate central bank decisions, and raise growth risks in Asia and beyond.

We also reported that, oil holds near $100 as Iran intensifies attacks in Strait of Hormuz.

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