By Ronnie Harui


Oil climbed while Asian equities fell, as the collapse of the U.S.-Iran peace talks held over the weekend revived investor concerns over supply disruptions as well as fears of an escalation in the Middle East conflict.

President Trump and his advisers are considering resuming limited military strikes in Iran, The Wall Street Journal reported, citing officials and people familiar with the situation. Also, U.S. Central Command, which oversees U.S. forces in the Middle East, said a blockade will begin Monday morning of all maritime traffic entering and exiting Iranian ports. The statement followed Trump's remarks on Sunday in which he threatened to blockade "any and all ships trying to enter or leave the Strait of Hormuz."

The Strait of Hormuz is a key waterway through which one-fifth of the world's oil is typically transported. Ahead of the weekend talks, market participants had been hoping that the U.S. and Iran could reach a diplomatic solution to their conflict and re-open the channel.

"If the blockade is enforced, it will disrupt shipping activity through the Strait of Hormuz," Commerzbank Research analysts said in a research report. "Previously, ships from certain countries were allowed to transit safely through the strait. It will put these vessels and countries at odds on whether to comply or face confrontation with the enforcing navy," they added.

Front-month West Texas Intermediate crude oil futures climbed 8.3% to $104.56 a barrel and front-month Brent crude oil futures rose 7.9% to $102.74 a barrel, ICE data showed.

Stock markets across Asia fell, with Japan's Nikkei Stock Average losing 0.8%, South Korea's Kospi dropping 0.9% and Australia's S&P/ASX 200 benchmark index shedding 0.6%. U.S. stock-market futures were lower, with eMini Nasdaq 100 futures falling 1.1%, eMini S&P 500 futures declining 0.9% and eMini Dow futures down 1.0%.

"For today, financial markets may remain defensive as the U.S. and Iran ended peace talks in Pakistan without an agreement and Trump announced a full naval blockade of the Strait of Hormuz, putting a fragile cease-fire at risk," UOB's global economics and markets research team said in a research report.


Write to Ronnie Harui at ronnie.harui@wsj.com


(END) Dow Jones Newswires

04-12-26 2121ET