Oil Jumps as Asian Shares Drop Amid U.S. Sanctions and Earnings Woes

Asian equity markets extended their decline for a second consecutive session on Thursday, as disappointing earnings from major U.S. technology companies triggered a broader selloff on Wall Street, while renewed geopolitical tensions stemming from fresh U.S. sanctions on Russia and China weighed on sentiment. Oil prices, meanwhile, rose sharply. The MSCI Asia-Pacific index excluding Japan slipped 0.3%, and Japan’s Nikkei 225 dropped 1.5%. Chinese equities in Hong Kong fell 0.4% after reports that the White House may restrict certain software-related exports to China in response to Beijing’s latest curbs on rare earth exports.

Market analysts noted that the absence of significant macroeconomic data left investors cautious amid heightened geopolitical risks during President Trump’s visit to Asia. Charu Chanana, chief investment strategist at Saxo Bank, observed that speculation over potential U.S. export restrictions on China has dampened sentiment in the technology sector, while renewed sanctions on Russia underscore ongoing global political uncertainty.

Globally, stock markets have retreated from record highs as the corporate earnings season progresses. While many companies have exceeded analysts’ forecasts, weaker-than-expected guidance from major tech firms has disappointed investors. South Korea’s benchmark index declined 0.2% following the Bank of Korea’s decision to keep interest rates unchanged, in line with expectations.

Oil prices surged, with Brent crude rising 2.3% to $64 per barrel after President Trump introduced new sanctions targeting Russian energy firms Lukoil and Rosneft. The move coincided with the European Union’s approval of its 19th sanctions package against Moscow, including a ban on Russian liquefied natural gas imports.

In the U.S., crude oil inventories declined last week, signaling stronger refining activity and demand. However, major U.S. tech stocks continued to weigh on investor confidence: Netflix shares plunged over 10% on weaker guidance, Tesla dropped 3.8% despite record revenue, and Apple lost 1.6% amid fresh EU antitrust complaints. Treasury yields remained steady at 3.955%, while markets priced in a near-certain 25-basis-point Federal Reserve rate cut later this month. The U.S. dollar edged 0.1% higher to 99.03, and gold eased 0.6% to $4,071 per ounce as investors took profits ahead of upcoming U.S. inflation data.