Asian shares are mostly lower as investors focus on the Iran war's impact on energy supplies

TOKYO — Asian shares mostly declined and oil prices surged higher Tuesday as investors eyed risks to the region’s energy supply because of the Iran war.

Shares in South Korea sank 4.8% as markets reopened after a holiday on Monday, to 5,946.06.

Benchmark U.S. crude rose 77 cents to $72.00 a barrel. Brent crude, the international standard, added $1.10 to $78.84 a barrel. They jumped Monday then fell back although still at higher levels than before due to worries that the war could clog the global flow of crude.

Japan's benchmark Nikkei 225 sank 2.1% to 56,853.48. Like other resource-poor countries in the region, Japan could be especially hit by the lack of access to the Strait of Hormuz since much of its oil and natural gas is shipped through there.

However, analysts say Japan has a sizable stockpile lasting more than 200 days and so the threat is not immediate.

Japanese energy stocks plunged, with Eneos Corp. down nearly 6% and Idemitsu Kosan down nearly 4%. Defense-related issues, which have risen recently on expectations of more military spending by Prime Minister Sanae Takaichi, sank back as traders sold to lock in gains from the day before. Mitsubishi Heavy plunged 5%, and IHI lost 4%.

In the rest of the region, Australia's S&P/ASX 200 lost 1.2% to 9,089.50, while Hong Kong's Hang Seng shed 0.1% to 26,038.29 and the Shanghai Composite index lost 0.3% to 4,170.63.

Stocks of airlines, including American Airlines, United and Delta, were some of Monday’s biggest losers on Wall Street. Higher oil prices threaten their already big fuel bills, the fighting in the Middle East also has closed airports and left travelers stranded.

The losses cascaded in Asia, with ANA stock down 2.4%, while Japan Airlines fell 5.2%, Korean Air declined 8.9% and Qantas Airways lost 2.9%.

The market reactions to the war have been relatively muted. Past military conflicts in the Middle East have not caused long-term drops for U.S. markets. For this war to knock down U.S. stocks in a significant and sustained way, the price of oil would perhaps need to jump above $100 per barrel, according to strategists at Morgan Stanley led by Michael Wilson.

“Since 2000, there have been 22 one-day oil price spikes of more than 10 percent,” said Stephen Innes, managing partner at SPI Asset Management. “In other words, energy shocks do not automatically derail equities unless they are severe and sustained. The market is well aware of that playbook.”

On Monday, the S&P 500 fell as much as 1.2% but finished with a gain of less than 0.1%, at 6,881.62. The Dow Jones Industrial Average dipped 0.1% to 48,904.78, and the Nasdaq composite rose 0.4% to 22,748.86. Both also recovered from steep early losses.

Gold climbed 1.2% as investors looked for safer things to own and as U.S. officials tried to persuade the world that this war will not last forever.

Helping the U.S. stock market to bounce back from its early losses were oil companies, which benefited from the rising price of crude. Exxon Mobil climbed 1.1%, and Marathon Petroleum rose 5.9%.

Companies that make equipment for the military also strengthened. Northrop Grumman climbed 5.9%, and RTX rallied 4.7%. Palantir Technologies, whose software helps global defense agencies and other customers, jumped 5.8%. Big Tech stocks also rose. Nvidia rose 2.9% and was the strongest single force pushing the S&P 500 higher.

In the bond market, the yield on the 10-year Treasury rose to 4.04% from 3.97% late Friday. A report showing growth for U.S. manufacturing was better last month than economists expected also helped to lift yields.

In currency trading, the U.S. dollar slipped to 157.32 Japanese yen from 157.47 yen. The euro cost $1.1693, inching up from $1.1690.