Oil prices remained elevated above $100 a barrel, as concerns persisted over potential supply disruptions in the Gulf

Most Asian stock markets dropped on Monday, pressured by sustained higher oil prices as the Middle East war entered its third week with no concrete signs of easing.

Investors remained cautious about the economic fallout from the escalating war between the U.S., Israel and Iran, which has disrupted energy flows and heightened geopolitical risks across global markets.

Oil prices remained elevated above $100 a barrel, as concerns persisted over potential supply disruptions in the Gulf. The rally has been driven by attacks on shipping routes and energy infrastructure near the strategically vital Strait of Hormuz, through which about a fifth of the world’s oil supply normally passes.

The war entered its third week with no clear signs of de-escalation.

The spike in crude prices has heightened concerns about inflation, particularly in Asia, where many economies rely heavily on imported energy.

Nikkei 225 index slid 1.2%, while the broader TOPIX index dropped 1%.

KOSPI edged 0.5% lower, while Straits Times index traded largely flat.

S&P/ASX 200 declined 0.5%, while futures tied to Nifty 50 edged up 0.1%.

Investors assessed latest economic data from China released on Monday. China’s industrial output added 6.3% year-on-year in the January-February period, beating expectations and accelerating from December’s 5.2% pace, official data showed.

Retail sales, a key gauge of consumption, rose 2.8% from a year earlier, also topping forecasts and improving from 0.9% growth in December.

The data pointed to a stronger-than-expected start to the year for the world’s second-largest economy, though investors remained cautious given global geopolitical risks.

Shanghai Composite index slipped 1%, while the blue-chip Shanghai Shenzhen CSI 300 slid 0.8%. Hang Seng was largely muted.