Oil price shocks continue to reverberate across markets. During early Asia-Pacific trading, Brent crude futures extended gains, surging by 10% intraday to reach $101.59 per barrel. Reports indicate that Oman has ordered the evacuation of vessels from the Mina Al Fahal oil terminal. According to port agent notifications, this measure is being implemented as a precaution.
The sharp rebound in oil prices precipitated a broad sell-off in Asia-Pacific equities. By the morning close, Japan's Nikkei 225 index fell 1.5%, while the Topix index declined 1.6%. South Korea's benchmark index, which had briefly turned positive earlier, saw its losses widen to over 1%. Hong Kong markets also retreated after an initial advance. European equity futures trended lower, with the Euro Stoxx 50 futures down 1.1%, and Germany's DAX index futures falling over 1.2%.
The surge in oil prices, which pushed Brent crude above $100 per barrel this morning, has triggered a global equity downturn. Goldman Sachs revised its forecast, now projecting Brent/WTI crude prices at $71/$67 per barrel for Q4 2026, up from previous estimates of $66/$62.
Japan's Nikkei 225 closed the morning session down 1.5%, with the Topix index dropping 1.6%. Vietnam's VN index fell 1% to 1,710.59 points, and the Philippine stock index declined 1% to 6,094.64 points. Hong Kong's Hang Seng Index dropped over 1% in morning trading, followed by the Hang Seng Tech Index also falling more than 1%. Tencent Music, Bilibili, and SenseTime each saw declines exceeding 3%.
European equity futures broadly declined, with Euro Stoxx 50 futures down 1.1%, while Germany's DAX and France's CAC 40 index futures both fell over 1.2%. U.S. stock index futures all dropped more than 1%, with the Russell 2000 futures plunging nearly 2.5%.
JPMorgan strategists noted that hedge funds are experiencing their largest drawdown since the market turbulence triggered by tariff impacts in April 2025, with the unwinding of crowded trades particularly impacting fast-money funds. The report highlighted that quantitative funds, including Commodity Trading Advisors (CTAs), have suffered their most significant losses in nearly a year since the outbreak of U.S.-Israel-Iran tensions. Equity long-short hedge funds, overweight in European and Korean markets while underweight software stocks, have also incurred substantial losses. Several major global hedge funds, including Balyasny Asset Management, Citadel, and Millennium Management, reportedly posted losses last week.
The primary market concern remains the potential prolongation of Middle East conflicts. Galaxy Securities analysts suggest that in a prolonged conflict scenario, traditional pricing logic—where U.S. Treasuries, the U.S. dollar, and core U.S. equities are considered "safe assets"—could be undermined. Rising energy costs, weakened U.S. fiscal discipline, and diminished strategic credibility may shift asset preferences. Gold, energy assets, non-dollar currencies, and markets with supply chain resilience and geopolitical stability, such as China, could potentially gain new premiums.
This morning's sudden oil price surge past $100 appears linked to developments in Oman. Sources directly informed by port agents reported that Oman has evacuated all vessels from the key oil export terminal at Mina Al Fahal as a precautionary measure. Located outside the Strait of Hormuz, Al Fahal remains one of the few ports capable of shipping Middle Eastern crude to global markets. However, recent Iranian attacks in the region have rendered nearby waters unsafe. Data intelligence firm Kpler notes that Al Fahal exports approximately 1 million barrels of Omani crude daily. While loading operations continue at the UAE's Fujairah port, also located outside the strait, some shipowners are avoiding it due to attack risks. Saudi Arabia's Yanbu port on the Red Sea coast remains operational for oil exports.
Despite former U.S. President Trump's assertion that the war would end quickly, tensions in the Middle East show no signs of abating. The Israeli Defense Forces announced early on the 12th that they detected a new wave of missile launches from Iran toward Israel, with air defense systems actively intercepting. This marked the second such announcement that day. Citing The Times of Israel, Xinhua reported that the IDF Home Front Command expects a more "challenging" situation in coming days due to attacks by Iran and Hezbollah, with current civil defense restrictions likely to remain until at least the 14th.
Notably, the International Energy Agency's historic release of oil from emergency reserves has failed to curb price surges, contrary to market expectations. Analysis suggests this emergency release during the Iran conflict remains insufficient to offset the near-halt of Hormuz Strait shipments and production disruptions coupled with inadequate crude storage in the Persian Gulf. Furthermore, the decision may prove counterproductive by reinforcing market expectations of a prolonged conflict.