Asian markets tumble as oil prices shoot higher amid calls for more sanctions against Russia

Higher fuel costs are devastating for Japan, which imports almost all its energy. Japan’s benchmark Nikkei 225 NIK, -3.31% dipped 3.2% in morning trading.

Hong Kong’s Hang Seng HSI, -3.41% dropped 3.3%, while South Korea’s Kospi 180721, -2.04% dived 2.4%. Australia’s S&P/ASX 200 XJO, -1.25% shed 1% while the Shanghai Composite SHCOMP, -1.48% lost 1.5%. Benchmark indexes in Singapore STI, -0.73%, Taiwan Y9999, -3.13% and Indonesia JAKIDX, -0.80% fell.

“The Ukraine-Russia conflict will continue to dominate market sentiments and no signs of conflict resolution thus far may likely put a cap on risk sentiments into the new week,” said Yeap Jun Rong, market strategist at IG in Singapore.

“It should be clear by now that economic sanctions will not deter any aggression from the Russians, but will serve more as a punitive measure at the expense of implication on global economic growth. Elevated oil prices may pose a threat to firms’ margins and consumer spending outlook.”

The crude surge followed a warning from Russian President Vladimir Putin that Ukrainian statehood was imperiled as Russian forces battered strategic locations. A temporary cease-fire in two Ukrainian cities failed over the weekend — and both sides blamed each other.

Oil prices came under additional pressure after Libya’s national oil company said an armed group had shut down two crucial oil fields. The move caused the country’s daily oil output to drop by 330,000.

U.S. House of Representatives Speaker Nancy Pelosi, meanwhile, said the House was exploring legislation to further isolate Russia from the global economy, including banning the import of its oil and energy products into the U.S.

U.S. futures fell, with the contract for the benchmark S&P 500 ES00, -1.29% down 1.6% and that for the Dow industrials YM00, -1.05% falling 1.3%.

Markets worldwide have swung wildly recently on worries about how high prices for oil, wheat and other commodities produced in the region will go because of Russia’s invasion, inflaming the world’s already high inflation.

Russian forces intensified shelling of cities in Ukraine’s center, north and south, according to a Ukrainian official, as a second attempt to evacuate civilians collapsed. Russia has made significant advances in southern Ukraine and along the coast, although many of its efforts have stalled, including an immense military convoy north of Kyiv.

Companies have been exiting Russia, including Mastercard MA, -3.00% and Visa V, -3.35%, as well as Netflix NFLX, -1.72%. The conflict in Ukraine also threatens the food supply in some regions, including Europe, Africa and Asia, which rely on the vast, fertile farmlands of the Black Sea region, known as the “breadbasket of the world.”

Wall Street finished last week with shares falling despite a much stronger report on U.S. jobs than economists expected. The S&P 500 SPX, -0.79% fell 0.8% to 4,328.87, posting its third weekly loss in the last four. It is now down just under 10% from its record set early this year.

The Dow DJIA, -0.53% initially fell more than 500 points Friday. It closed 0.5% lower at 33,614.80. The Nasdaq COMP, -1.66% fell 1.7% to 13,313.44.

In currency trading, the U.S. dollar USDJPY, +0.06% edged up to 114.93 Japanese yen from 114.86 yen.

MarketWatch contributed to this report.