Portugal Colonial - Crude, gas prices soar and stocks drop after US strikes on Iran

Brent briefly spiked almost 14 percent and West Texas Intermediate nearly 12 percent at the start of business after the attack on the Islamic republic, which killed supreme leader Ayatollah Ali Khamenei and other senior officials.

The bombings have also seen the vital Strait of Hormuz -- through which around 20 percent of global seaborne oil passes -- effectively shut and several ships attacked, fanning supply fears.

Equity markets across Asia sank, with Tokyo, Hong Kong, Singapore, Mumbai, Bangkok, Wellington and Taipei all deep in the red. US futures were down more than one percent. Still, Shanghai edged up and Sydney was flat.

London sank one percent at the open, while Frankfurt and Paris both shed more than two percent.

Airline stocks took a battering as they were forced to cancel flights to the region. Cathay Pacific sank four percent in Hong Kong, Sydney-listed Qantas dived 5.4 percent and Singapore Airlines was off 4.8 percent. Japan's ANA and JAL fell more than five percent.

However, energy firms rallied, with Australia's Woodside Energy and Santos each jumping more than six percent, while PetroChina added almost four percent in Hong Kong. Inpex in Japan was up more than six percent.

Gold -- a key go-to in times of turmoil -- climbed two percent, while the dollar also saw a boost from a rush into safe havens.

Crude pared some of its gains to sit more than nine percent higher. while European gas prices rocketed more than 20 percent.

Brent had already rallied last week on growing concerns Trump would order an attack as talks aimed at curtailing Iran's nuclear programme stuttered.

"If higher oil prices persist, it raises the risk of stickier headline inflation and can slow the pace at which inflation prints improve," wrote Saxo Markets' Charu Chanana.

"That does not automatically mean policy tightening, but it can make the Fed more cautious about cutting quickly, because energy-driven inflation can spill into expectations and broader pricing behaviour over time."

US President Donald Trump urged Iranians to rise up against their government and said the war could last "four weeks".

The powerful head of Iran's Supreme National Security Council said Monday the country "will not negotiate with the United States" and denied media reports that officials had sought to initiate talks with the Trump administration.

- Trump's 'Achilles heel' -

Iran continued a retaliatory missile and drone campaign in the Gulf, adding to fears the conflict could spread as Tel Aviv launched attacks on Lebanon after Tehran-backed militant group Hezbollah fired rockets at Israel in retaliation for the killing of Khamenei.

While Iran has not officially closed the Strait of Hormuz, its Revolutionary Guards have warned against transiting the waterway.

On Sunday, at least two ships were struck, one off Oman's coast and another off the UAE, British maritime security agency UKMTO said.

Iranian state television said an oil tanker was hit and was sinking after trying to "illegally" pass through the strait.

In such a situation, insurance costs become prohibitive, said Amena Bakr, head of Middle East and OPEC+ research at analysts Kpler, predicting that crude could hit $90.

The main shipping companies have already confirmed they are suspending the passage of their fleets through the strait.

In theory, oil-importing countries have reserves, with OECD members required to maintain 90 days' worth of stocks, but prices above $100 cannot be ruled out.

If the blockade of the Strait of Hormuz continues, "no matter how much spare capacity (in the strategic reserves) is not going to fill that gap. That gap is just too big", said Bakr.

Another analyst at Kpler, Michelle Brouhard, described high oil prices as "the Achilles heel of Trump".

She said Iran was likely to look to keep crude prices high to force Trump to back down, as he promised his electorate low prices, as the United States approaches mid-term elections in November.

Gas prices also soared Monday -- dealing another blow to the world economy -- as Qatar is a key exporter of liquefied natural gas, heightening inflationary risks.

Rising energy prices, increased shipping costs and loss of revenue for air transport could have "a harmful effect on growth", said economist Eric Dor, from the IESEG School of Management in Paris.

"If it's a matter of three days, it's not serious. But if it's over a longer period, then it will have an additional recessionary effect," he told AFP.

- Key figures at around 0815 GMT -

West Texas Intermediate: UP 9.0 percent at $73.04 per barrel

Brent North Sea Crude: UP 9.7 percent at $79.95 per barrel

Tokyo - Nikkei 225: DOWN 1.4 percent at 58,057.24 (close)

Hong Kong - Hang Seng Index: DOWN 2.1 percent at 26,059.85 (close)

Shanghai - Composite: UP 0.5 percent at 4,182.59 (close)

London - FTSE 100: DOWN 1.0 percent at 10,801.66

Euro/dollar: DOWN at $1.1712 from $1.1823 on Friday

Pound/dollar: DOWN at $1.3370 from $1.3486

Dollar/yen: UP at 157.00 yen from 156.03 yen

Euro/pound: UP at 87.69 pence from 87.67 pence

New York - Dow: DOWN 1.1 percent at 48,977.92 (close)

A.F.Rosado--PC