Asian share futures plummeted Monday as surging oil prices threatened global inflation and higher interest rates. Brent crude jumped 17% to $108.73 a barrel, with U.S. crude up 19% to $108.33.
Iran appointed Mojtaba Khamenei as supreme leader, indicating hardliners control the nation amidst ongoing conflict with the U.S. and Israel. The Strait of Hormuz remains a point of concern for energy transport. Bruce Kasman, chief economist at JPMorgan, noted the global economy's dependence on Mideast oil. He anticipates near-term oil prices hitting $120 a barrel, followed by moderation, but expects Brent crude to settle around $80 through mid-year absent a political resolution. A sustained conflict could push oil above $120 and risk global recession.
Wall Street futures fell, with S&P 500 futures down 1.6% and Nasdaq futures down 1.7%. Japan's Nikkei futures also saw a significant drop. In bond markets, rising inflation fears outweighed safe-haven demand, impacting Treasury note futures. Investors sought U.S. dollar liquidity, while currencies of energy-importing nations weakened. The dollar strengthened against the yen, and the euro declined against the dollar. Gold eased as investors booked profits to offset losses elsewhere.