Oil Spikes Above $100 as U.S. Signals Naval Blockade of Iran

Asia-Pacific equities opened lower on Monday as investors reacted to the breakdown of negotiations in Islamabad. The failure to reach an agreement to end the conflict in the Middle East has reignited fears of a prolonged war between the U.S. and Iran, creating a risk-off environment across global exchanges. The geopolitical tension triggered an immediate spike in energy costs, with crude oil prices breaching the $100 threshold. This surge is expected to place significant inflationary pressure on global economies and strain industrial output as energy inputs become more expensive. Price action was aggressive on Sunday, with West Texas Intermediate (WTI) jumping 8.56% to $104.84 per barrel and Brent crude rising 8.61% to $103.38. In Asia, South Korea's Kospi led losses, falling 1.83%, while Japan's Nikkei 225 declined 0.84% and Australia's S&P/ASX 200 dropped 0.74%. Wall Street futures also signaled a bearish trend. Dow Jones Industrial Average futures dropped 517 points, or 1.1%, while S&P 500 and Nasdaq 100 futures shed 1.1% and 1.2%, respectively. The escalation follows a brief two-week ceasefire. Reports indicate that the U.S. administration is considering the resumption of airstrikes on Iranian infrastructure, including bridges and power plants, following the diplomatic failure.