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 stated it would respond by targeting key infrastructure in the region, including energy facilities.
Japan and South Korea have been particularly impacted by the conflict, as they are heavily dependent on oil and gas that would normally pass through the strait.
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.
About 20% of the world's oil and liquefied natural gas (LNG) usually passes through the waterway - and the war has sent global fuel prices soaring.
On Monday, International Energy Agency chief Fatih Birol indicated that the war could precipitate the worst energy crisis in decades.
He compared the current energy situation to those of the 1970s and the impact of Russia's invasion of Ukraine in 2022.
"This crisis as things stand is now two oil crises and one gas crash put all together," he stated.
Other markets in the Asia-Pacific region were also lower on Monday, with Hong Kong's Hang Seng down by 2.5% and the Taiwan Weighted Index losing 2%.
Global oil prices were relatively steady; Brent crude was 0.2% lower at $112 a barrel, whereas US-traded oil saw a slight increase of 0.3% at $98.57.
