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Global oil prices climbed sharply while Asian stock markets declined Monday, as the conflict involving the United States, Israel and Iran entered its fifth week, intensifying concerns over energy supplies and economic stability.

Brent crude futures rose more than 3% to exceed $115 (£86.77) per barrel, while U.S. benchmark oil gained nearly 2% to reach $101.62. The latest increase puts Brent on course for its largest monthly rise on record.

Equity markets across Asia reacted negatively. Japan’s Nikkei 225 index fell 2.8%, and South Korea’s Kospi closed down nearly 3%.

The market turbulence follows a widening of the conflict over the weekend, when Iran-backed Houthi forces in Yemen launched strikes against Israel. Tehran also signaled it may broaden its retaliation, warning of potential attacks targeting universities and residences of U.S. and Israeli officials.

In an interview with the Financial Times on Sunday, U.S. President Donald Trump suggested the possibility of seizing Iranian oil infrastructure, including the key export terminal on Kharg Island. Addressing Iran’s defensive capabilities there, he said: "I don't think they have any defence. We could take it very easily."

Trump likened the idea to U.S. actions in Venezuela, where Washington intends to maintain control over the oil sector “indefinitely” following the January seizure involving then-President Nicolás Maduro.

Meanwhile, Iran’s parliamentary speaker issued a warning that the country’s military was “waiting for American soldiers,” as an additional 3,500 U.S. troops were deployed to the region.

Energy markets have experienced significant volatility since Iran responded to earlier U.S. and Israeli strikes by threatening shipping routes, particularly vessels attempting to pass through the Strait of Hormuz.

Shipping analyst Lars Jensen cautioned that oil prices may continue rising even if transit routes reopen quickly. “We need to keep in mind that a lot of the oil that was loaded in the Persian gulf prior to this crisis is only now arriving in refineries,” he told the BBC.

Jensen added that the broader consequences of the conflict could exceed those seen during the 1970s oil crisis, which triggered widespread economic disruption. Now head of consultancy Vespucci Maritime, he also warned of knock-on effects for global food prices.

"You've got 20 to 30% of the seaborne fertiliser in the world originating from the Gulf. This will mean rapidly escalating food prices, especially in poorer countries," he said.

Judith McKenzie, a partner at investment firm Downing, noted that the full impact of rising oil prices has yet to reach consumers. “Oil shocks don't show up instantly,” she told BBC Radio 4’s Today programme. “If we can get some resolution in the Gulf this week then, although it's going to take a little bit of time to unwind and we will see inflation, it is fixable.”

Roughly 20% of global oil and gas typically flows through the Strait of Hormuz, though traffic has been largely disrupted, contributing to the surge in prices.

Sean Foley, an energy markets specialist at Macquarie University, warned that prices are likely to climb further if tensions persist. He also highlighted risks linked to Houthi activity near Yemen’s Bab al-Mandeb strait, a critical shipping lane.

A blockade there could disrupt an additional 10% of global oil supply, “putting significant strain on global supply chains,” Foley said.

Andrew Lipow of Lipow Oil Associates projected Brent crude could reach $130 per barrel in the coming weeks if threats to supply continue. “My greatest fear is that you have a general economic slowdown around the world... because consumers simply run out of money as they're spending more on energy and, in addition, food,” he said.

Before the conflict escalated, Brent crude traded at about $72 per barrel on Feb. 27, the day before U.S. and Israeli strikes on Iran. By March 18, prices had surged to $119.50, marking the highest level since June 2022.