MSCI’s broadest index of ​Asia-Pacific shares outside Japan shed 2.5%

Share markets dropped in Asia on Monday as the US and Iran traded escalating threats and ​Israel planned for “weeks” more fighting, sending oil prices on another roller-coaster ride.

Nikkei declined ​3.8%, bringing losses for March so far to more than 13%. South Korea’s market slid 5.2%, making a 12% decline for the month.

MSCI’s broadest index of ​Asia-Pacific shares outside Japan shed 2.5%, while Chinese blue chips declined 1.9%.

Oil prices were again choppy with Brent last up 0.4% at $112.62 ⁠a barrel, and 55% higher on the month so far.

Near-term supplies have been aided by the U.S. allowing Iranian and Russian oil ​to be sold from tankers, but the growing risk of longer-term shortages was lifting futures down the curve. September Brent, for instance, was up $1 at $92.90 suggesting high prices were ​here to stay.

The war could still go on for many weeks yet and see oil prices rise say to $150 a barrel, said Shane Oliver, head of investment strategy at fund manager AMP. And the steady destruction of energy infrastructure means it will take longer to get supply back to normal.

It’s also worth noting that past oil shocks unfolded over many months in terms of the rise ​in oil prices as the full impact became clearer – it was over about 4 months in 1973 and a year in 1979, he said.

Analysts at HSBC noted Singapore jet fuel ​was up 175% this year to a multi-decade high, while Asian liquefied natural gas had jumped 130%. Bunker fuel used in shipping had blown out, raising the cost of transporting goods, while soaring fertiliser ⁠prices will make food more expensive.