Asia shares decline as geopolitical tensions drive oil volatility. Markets across the region posted losses Friday, with Tokyo's Nikkei falling 1.3% and Seoul's Kospi dropping 1.8%, tracking Wall Street's Thursday decline. Oil prices remained elevated near $100 per barrel amid escalating Iran tensions. Iran's new Supreme Leader vowed continued leverage over the Strait of Hormuz, a critical waterway through which roughly 20% of global oil flows. The strait faces significant disruptions, raising concerns about supply constraints. Brent crude surged to near $120 earlier this week, the highest since 2022, before settling near $100. Analysts warn that rising energy costs could intensify global inflation and increase production expenses for sectors including AI and semiconductors.
