Japan's Nikkei 225 share index falls more than 7% as oil soars to $114 a barrel

Hong Kong's Hang Seng lost 2.5% and the Shanghai Composite index was down 1.1%.

Taiwan's benchmark dived 5% and other regional markets also swooned.

The futures for the S&P 500, Nasdaq composite index and the Dow Jones Industrial Average dropped more than 2%.

The price for a barrel of Brent crude, was trading at $114.78 a barrel and U.S. benchmark crude jumped to nearly $114.00 a barrel. Both were more than 20% above their closing prices Friday.

Crude prices have spiked to their highest levels in 14 years. They last rose above $100 shortly after Russia invaded Ukraine in 2022. Supply concerns have driven crude and gasoline higher as the war ensnares major oil-producing countries and hinders exports from the Persian Gulf.

“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.

Surging oil and gas prices, if they persist, could cascade through the global economy, further complicating matters for countries still adjusting to higher tariffs on exports to the United States under President Donald Trump.

Senior officials of Southeast Asian countries were meeting this week in Manila, the Philippines, where they are expected to discuss ways to counter the shock from higher energy costs.

Oil prices have surged more than 60% as the war, now in its second week, ensnared countries and places that are critical to the production and movement of oil and gas from the Persian Gulf.

If oil prices stay above $100 per barrel, some analysts and investors say it could cause serious damage to the global economy.

On Friday, the S&P 500 dropped 1.3% after a report showed U.S. employers cut more jobs last month than they created and after oil prices shot above $90 per barrel. The combination of a weak economy and high inflation is a worst-case scenario for investors because the Federal Reserve has no good tool to fix both problems at the same time.

The Dow plunged as many as 945 points before finishing with a loss of 453, or 0.9%, and the Nasdaq composite sank 1.6%.

Early Monday, the U.S. dollar, which retains its status as a safe haven for investors bracing against uncertainty, gained against other major currencies. It was trading at 158.87 Japanese yen, up 0.9% from Friday's close. The euro fell to $1.1513, down from $1.1618.