Oil was sitting on strong gains this week with Brent remaining close to $100/barrel, while most Asian stocks were headed for weekly declines

Most Asian stocks dropped on Friday as markets remained on edge amid little de-escalation in the U.S.-Israel war on Iran, with the war’s inflationary effects being a key point of concern.

Oil was sitting on strong gains this week with Brent remaining close to $100/barrel, while most Asian stocks were headed for weekly declines.

Nikkei 225 and KOSPI indexes were the worst performers for the day, dropping nearly 1.2% apiece. The broader TOPIX slipped 0.6%.

The Nikkei was also weighed by an over 6% decline in Honda Motor Co Ltd, after the Japanese automaker forecast an annual loss due to restructuring costs associated with its electric vehicle business.

The Nikkei was trading down 3.3% this week, while the KOSPI was headed for a 1.4% decline.

Asian markets were pressured by concerns over oil supply disruptions stemming from the Iran war, especially as Iran blocked the Strait of Hormuz in response to U.S. and Israeli aggression.

The region is heavily dependent on oil supplies from the Middle East, with a prolonged supply outage expected to cause widespread economic disruptions.

Japan, South Korea, and India are seen as among the most exposed, given their reliance on oil imports. India’s Nifty 50 index was headed for a 2.4% loss this week.

Chinese shares fared better than their Asian peers this week, with the country seen relatively well-insulated from near-term oil supply shocks.

Shanghai Shenzhen CSI 300 and Shanghai Composite indexes advanced slightly on Friday, and were sitting on mild gains for the week.

Hang Seng index dropped 0.2% and was nursing a 0.3% loss this week, amid some weakness in technology names.