Major stock markets in Asia slumped on Monday after Washington and Tehran threatened to intensify hostilities, as the Iran war enters its fourth week.
Japan's benchmark Nikkei 225 index was 3.4% lower in morning trade, while South Korea's Kospi fell by almost 5%.
US President Donald Trump warned on Saturday that he would obliterate Iranian power plants if Iran did not open the key Strait of Hormuz shipping route. Iran responded with threats to target significant infrastructure, including energy facilities.
Japan and South Korea, being heavily reliant on oil and gas that would normally pass through the strait, have been particularly affected by the conflict.
Iran has effectively blocked the Strait of Hormuz, one of the world's busiest oil shipping channels, since the US and Israel attacked the country on 28 February.
Approximately 20% of the world's oil and liquefied natural gas typically passes through the waterway, and the ongoing conflict has driven global fuel prices higher.
International Energy Agency chief Fatih Birol warned that the war could lead to the worst energy crisis in decades, comparing it to the crises of the 1970s and the impacts of Russia's 2022 invasion of Ukraine.
On Monday, Birol mentioned, This crisis as things stand is now two oil crises and one gas crash put all together.
Other markets in the Asia-Pacific region also saw declines, with Hong Kong's Hang Seng down by 2.5% and the Taiwan Weighted Index losing 2%.
While global oil prices remained steady, Brent crude was 0.2% lower at $112 a barrel, and US-traded oil was 0.3% higher at $98.57.
