Shares slip in Asia as oil climbs, rate hikes loom

Asian share markets experienced a decline on Monday as oil prices surged due to new supply concerns and geopolitical tensions. Brent crude climbed 3% following attacks on a Saudi oil pipeline and Yemen's Houthis advancing, causing disruptions to global energy supplies. The scheduled meeting in Oman between Iran and Gulf Arab states to discuss opening the Strait of Hormuz was postponed, heightening fears of elevated oil prices and potential inflation.

The US Federal Reserve is expected to raise interest rates by 25 basis points on Wednesday, with another hike possible by December, according to JPMorgan's chief US economist Michael Feroli. Analysts warn that failing to follow through on these actions could diminish the Fed's credibility. Meanwhile, US crude oil prices rose 2.8% to $102.85 a barrel, while Nikkei futures fell 2% to 63,260, from a cash close of 64,011.

S&P 500 and Nasdaq futures also declined, with high-yield test equity valuations and Treasury futures showing slight gains. Despite concerns, some experts believe strong corporate earnings will help Wall Street despite rising borrowing costs, while the Bank of Japan is expected to raise its cash rate by 25 basis points to 1.25% at its upcoming meeting.