| (BSS/AFP) - Oil opened higher on Monday as the war in the Middle East squeezes energy supplies, with fresh threats from both sides quashing any hope of de-escalation for now.
Many Asian markets were closed for public holidays, but stocks in Tokyo and Seoul rose, while movements on other open exchanges were mixed.
"Geopolitical risks remain the dominant driver of market sentiment," MUFG`s Lloyd Chan said in a note on Monday.
US President Donald Trump had made an expletive-laced threat Sunday to destroy Iran`s civilian infrastructure, demanding Tehran bow to his demands for a deal to reopen the Gulf to shipping.
Hours later, Iran`s central military command warned of "much more devastating" retaliation if its adversaries hit civilian targets.
Chan said "it remains to be seen whether this escalatory rhetoric ultimately proves to be another `TACO` moment" -- a jokey acronym for "Trump always chickens out".
But "the persistence of threats to critical Iranian infrastructure keeps escalation risks elevated, with no credible de-escalation path in sight", Chan said.
"As a result, oil prices are likely to remain elevated."
Crude oil prices spiked at the week`s market opening but pared gains in morning trade. US benchmark West Texas Intermediate was flat at $111.61 a barrel and North Sea Brent crude gained 1.2 percent to $110.35.
"Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!!" Trump wrote on his Truth Social platform, later telling Fox News there was a "good chance" Iran would agree to a deal.
The tumultuous developments are keeping Asian currencies under pressure while "reinforcing a bias toward USD strength", Chan wrote. Gold prices also fell Monday.
Tokyo was up 1.6 percent and Seoul gained 2.2 percent. Singapore was also up 0.4 percent, but Jakarta shed 0.6 percent.
Chinese markets were closed for the Qingming Festival while others, including Sydney and Wellington, took a break for Easter Monday.
The war, entering its sixth week since the US and Israel first attacked Iran on February 28, has engulfed the Middle East in conflict and upended the global economy.
Iran has virtually blocked the Strait of Hormuz, through which about 20 percent of the world`s oil and gas transits, sending petroleum prices skyrocketing.
- Key figures at around 0230 GMT -
Tokyo - Nikkei 225: UP 1.6 percent at 54,001.64 (break)
Hong Kong - Hang Seng Index: CLOSED for holiday
Shanghai - Composite: CLOSED for holiday
Euro/dollar: DOWN at $1.1522 from $1.1535 on Friday
Pound/dollar: DOWN at $1.3214 from $1.3224
Dollar/yen: DOWN at 159.57 from 159.63
Euro/pound: DOWN at 87.19 pence from 87.22 pence
West Texas Intermediate: FLAT at $111.61 per barrel
Brent North Sea Crude: UP 1.2 percent at $110.35 per barrel
New York - Dow: DOWN 0.1 percent at 46,504.67 (close)
London - FTSE 100: UP 0.7 percent at 10,436.29 (close)
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