Middle East Escalation Spikes Oil Prices; Singapore Markets Brace for Decline

The Singapore stock market is expected to open lower on Tuesday, following a wave of global selling triggered by a sharp escalation in Middle East tensions. While the Straits Times Index (STI) managed a marginal gain of 0.12% to close at 5,004.07 on Monday, the broader sentiment remains fragile after a two-day slide of approximately 25 points. The volatility stems from a critical breakdown in relations between the U.S. and Iran. Reports indicate that Iran has closed the Strait of Hormuz and engaged in attacks on tankers, citing a U.S. blockade of Iranian ports. In response, U.S. forces have seized an Iranian-flagged cargo vessel in the Gulf of Oman, further exacerbating the risk of a wider conflict. This geopolitical shock sent energy markets soaring. West Texas Intermediate (WTI) crude for May delivery jumped 6.61%, adding $5.54 to settle at $89.39 per barrel. This energy spike coincided with a decline in U.S. indices, with the S&P 500 falling 0.24% and the NASDAQ dropping 0.26% as investors pivoted toward risk-off assets. Within the STI, performance was fragmented. Real estate saw notable gains, with UOL Group surging 5.12% and City Developments rising 4.18%. However, industrial and shipping names struggled, notably Seatrium Limited, which tumbled 2.89%. Analysts expect Asian bourses to follow the lead of the weakened European and U.S. markets as concerns over energy supply disruptions mount.