Shares drop as crude crosses $110

The price for a barrel of Brent crude was $106.61 a barrel

World shares tumbled on Monday, with Nikkei 225 index slumping more than 5%, after oil prices spiked at nearly $120 a barrel, casting a shadow over economies heavily dependent on imports of oil and gas from the Middle East.

Oil prices rocketed higher after both sides in the war struck new targets over the weekend, including civilian ones.

In early European trading, Germany’s DAX declined 2.6% to 22,983.67 and the CAC 40 in Paris shed 2.7% to 7,779.46. Britain’s FTSE 100 slipped 1.9% to 10,089.05. The only market to show gains was in oil exporter Norway, where its benchmark edged 0.1% higher.

During Asian trading, Nikkei 225 plunged more than 7% early in the day but regained some of those losses to close 5.2% lower at 52,728.72. Kospi sank 6% to 5,251.87.

Chinese markets, which tend to be less affected by global trends, saw more moderate losses. Hang Seng dropped 1.4% to 25,408.46 and the Shanghai Composite index declined 0.7% to 4,096.60.

Taiwan’s benchmark dipped 4.4% and Sensex dropped 2.3%. Other markets also dropped.

The futures for the S&P 500, Nasdaq composite index and the Dow Jones Industrial Average were trading more than 1% lower after declining more than 2% late Sunday.

As of 0900 GMT, the price for a barrel of Brent crude was $106.61 a barrel.

Crude prices have risen to their highest levels in at least 14 years as the war ensnares countries and places that are critical to the production and movement of oil and gas from the Persian Gulf. They last rose above $100 shortly after Russia invaded Ukraine in 2022.

The market woke up to the sound every macro trader dreads. The oil alarm bell. And this time it was not a polite chime. It was a fire siren, Stephen Innes of SPI Asset Management said in a commentary.