Asian airline stocks declined sharply on Monday amid escalating tensions in the Middle East following military actions by the United States and Israel against Iran. Major carriers such as Singapore Airlines, Qantas, Cathay Pacific, and Japan Airlines experienced stock drops of up to 5.6%, with Singapore Airlines additionally canceling 16 flights on the Singapore-Dubai route due to the conflict. The unrest has led to airport closures at Doha, Dubai, and Abu Dhabi, disrupting hundreds of flights and impacting regional air travel.
Meanwhile, defense stocks in Asia-Pacific rose as global military spending hit a record high of $2.6 trillion in 2025, indicating increased investor confidence in the defense industry amid ongoing geopolitical instability. Notably, Japanese defense firm Mitsubishi Heavy Industries and Singapore’s ST Engineering reported gains of over 3%.
Simultaneously, oil prices surged with Brent Crude reaching $82.37 per barrel and West Texas Intermediate climbing to $75.33, levels not seen since early 2023. Australian energy companies such as Woodside Energy and Hibiscus Petroleum experienced substantial increases, reflecting market expectations of potential supply disruptions from the Middle East.
The broader financial markets responded with declines; Hong Kong’s Hang Seng Index fell by 1.6%, Singapore’s Straits Times Index dropped by 1.8%, and Japan’s Nikkei declined by 1.4%. Experts warn that ongoing geopolitical tensions could continue to influence global markets, energy prices, and airline operations in the coming weeks.
