Asian stocks mixed, oil soars on Iran sanctions worries

Asian stocks were mixed on Tuesday while oil prices jumped to their greatest level since October following the U.S. said it could soon impose sanctions on most buyers of Iranian oil.

Japan’s Nikkei 225 index dropped 0.2% to 22,165.41. The Kospi at South Korea was 0.1% higher at 2,217.31 while the Shanghai Composite grew up 0.6percent to 3,194.88. Hong Kong’s Hang Seng lost 0.1percent to 29,926.69.

Shares dropped in Singapore and Taiwan but rose in Indonesia.

There was no impetus for buying in Asia. Reports from a current high-level meeting in China, which had been chaired by President Xi Jinping, showed openness to fine-tune monetary policy but raised concerns about government stimulus. Traders were awaiting for a ton of U.S. earnings reports from big companies including Twitter starting Tuesday.

On Wall Street, the spike oil prices boosted energy stocks.

The wide S&P 500 was up 0.1% in 2,907.97 while the Dow Jones Industrial Average fell 0.2% to 26,511.05. The Nasdaq composite picked up 0.2percent to 8,015.27. The Russell 2000 index of smaller company stocks shed 0.4% to 1,560.04.

On Mondaythe Trump administration said it wouldn’t longer exempt any states from U.S. sanctions if they still continue to buy Iranian oil. Eight waivers as it reimposed sanctions on Iran had been given by the government. May 2 these expire.

Asian countries, namely India, China, Japan and South Korea are major importers of oil. The move will choke off over $50 billion of yearly Iranian income, which the U.S. says funds destabilizing action in the Middle East and beyond.

“The instant contracts quickly repriced greater on fear fears that markets could face an immediate source crunch, adding more pressure to the tenuous international distribution squeeze,” Stephen Innes of SPI Asset Management stated in a commentary.

Industry experts said that the sanctions could remove up to 1.2 million barrels of oil every day from international markets. But that number will likely be lower, based on petroleum that is how much Iran has been export and how countries respond.

ENERGY: Oil prices climbed on the information for the third consecutive day. Benchmark U.S. primitive added 34 cents to $65.89 per barrel in electronic trading on the New York Mercantile Exchange. The contract surged 1.48 to $65.55 per barrel Monday. It jumped $2.07 to $74.04 per barrel in the last session.

CURRENCIES: The dollar weakened to 111.80 yen by 111.93 yen late Monday.