U.S. Seizes Iranian Vessel as Middle East Tensions Spike; Oil Prices Surge

Asia-Pacific markets opened mixed on Monday as geopolitical instability intensified following the U.S. Navy's seizure of an Iranian-flagged cargo ship. The operation, involving a guided missile destroyer and Marine boarding parties, marks a significant escalation in the ongoing naval blockade of Iranian ports. The incident follows reports of Iranian forces firing upon commercial vessels in the Strait of Hormuz, a critical maritime chokepoint. In response to the blockade, Tehran has canceled scheduled negotiations in Islamabad, viewing the U.S. actions as a violation of a previous ceasefire. President Donald Trump has intensified the rhetoric, warning that the U.S. would target Iranian infrastructure, including power plants and bridges, should Tehran fail to meet Washington's terms to end the conflict. Energy markets responded aggressively to the risk of supply disruption. West Texas Intermediate (WTI) futures climbed 8.11% to $90.65 per barrel, while Brent crude rose 7.21% to $96.90. Equity markets showed fragmented reactions. While Japan's Nikkei 225 and South Korea's Kospi saw modest gains, Australia's S&P/ASX 200 declined. U.S. futures turned negative, with the Dow Jones Industrial Average futures dropping 425 points and the S&P 500 futures sliding 0.8%, erasing some of the momentum from Friday's record-breaking session.