Oil prices jumped sharply while global equities retreated after Donald Trump cautioned that the Middle East conflict could continue for at least another month.
Brent crude leapt as much as 13pc at the open to trade above $82 a barrel, before easing back to stand around 7.6pc higher at just over $78.
The spike in energy prices risks reigniting inflationary pressures worldwide, compounding strains on economies already grappling with a trade dispute initiated by the US president.
Japan, which relies entirely on imported oil, was among the most exposed. The Nikkei fell 1.6pc overnight, with airline stocks leading the declines amid concerns over rising fuel costs.
Hong Kong’s Hang Seng dropped 2pc. However, mainland Chinese blue-chip stocks edged higher, despite China sourcing a significant share of its seaborne oil imports from the Middle East.
In the Gulf, stock exchanges in the UAE and Kuwait were temporarily shut, with authorities citing “exceptional circumstances”.
In comments to the Daily Mail, President Trump said the fighting could persist for another four weeks and signalled that military operations would continue until US objectives had been achieved.
