Global oil prices have jumped above $110 (£82.74) a barrel, and stock markets have slumped as the escalating US-Israeli war with Iran has fuelled fears of prolonged disruption to shipments through the Strait of Hormuz.
Iran on Sunday named Mojtaba Khamenei to succeed his father, Ali Khamenei, as Supreme Leader, signalling that a week into the conflict, hardliners remain in charge of the country.
The US and Israel launched fresh waves of airstrikes across Iran over the weekend, hitting multiple targets, including oil depots.
Major disruption to energy supplies from the region threatens to push up prices for consumers and businesses worldwide.
On Monday morning in Asia, Brent crude was almost 24% higher at $114.74, while Nymex light sweet was up by more than 26% at $114.78.
Stock markets in the Asia-Pacific region fell sharply in morning trade, with Japan's Nikkei 225 index down by more than 7%, the Hang Seng in Hong Kong losing over 3%, and the ASX 200 in Australia more than 4% lower.
South Korea's Kospi index, which has been hit especially hard since the conflict began, slipped by more than 8%, triggering a 20-minute halt to trading.
The so-called circuit breaker is a mechanism designed to curb panic selling. It also came into effect on Wednesday, when the Kospi slumped by 12%.
About a fifth of the world's oil supply is usually shipped through the Strait of Hormuz. But traffic through the narrow passage has all but halted since the war started a week ago.
Many in the markets predicted that oil would hit the $ 100-a-barrel mark this week.
In the event, it took about a minute to jump 10%, and then another 15 minutes to rise a further 10% in early Asian trading.
Last week, the markets had been relatively relaxed about the seemingly nightmarish scenario of millions of barrels of crude and liquefied natural gas trapped in the Gulf, unable or unwilling to transit the Strait of Hormuz.
But the escalations over the weekend, alongside scenes of destruction of energy infrastructure both in Iran and across the Gulf, saw the markets take a rapid fright.
The question now is, where does this go? Some analysts argue that if the shutdown in the Strait lasts until the end of March, we could see record oil prices above $150 a barrel.
Adnan Mazarei from the Peterson Institute for International Economics said the jump in oil prices was expected, given how production has been halted in some Gulf countries and the signs of a prolonged conflict in the region.
"People are realising that this won't end quickly," he said, adding that the promises of insurance and objectives laid out by the US are "becoming more unrealistic."
The rise in oil prices could also increase the cost of important derivative products such as jet fuel and vital precursors for fertilisers.
The physical supplies from the Gulf are mainly consumed in Asia.
Already, however, there are signs that Asian consumers are bidding up prices for US gas, with some tankers originally heading for Europe turning around in the mid-Atlantic.
US President Donald Trump responded to the jump in prices by saying that short-term rises were a "small price to pay" for removing Iran's nuclear threat.
His energy secretary told US broadcasters on Sunday that Israel, not the US, was targeting Iran's energy infrastructure, amid some concern about rising domestic pump prices caused by the war.
BBC