Oil prices surged on Monday as concerns over disruptions to Middle East supplies intensified following the closure of a key Saudi Arabian pipeline and an attack on a merchant vessel in the Strait of Hormuz.

Both major crude benchmarks rose more than three per cent at one point, with Brent crude trading at $107.66 per barrel and West Texas Intermediate at $102.73.

Saudi Arabia reportedly shut its East-West pipeline after drone attacks by Yemen’s Houthi rebels, while a merchant vessel was struck in the Strait of Hormuz.

The developments heightened concerns over global oil supplies, particularly as the Strait of Hormuz remains a major route for the transportation of crude oil.

The situation also added to inflationary pressures ahead of an expected interest rate increase by the US Federal Reserve later in the week.

Surging energy costs have contributed significantly to global inflation since the conflict involving the United States, Israel and Iran began in February.

Market expectations of higher interest rates have meanwhile weighed on global equity markets, particularly technology companies whose artificial intelligence investments depend heavily on financing.

Technology stocks came under further pressure after executives in the artificial intelligence sector raised concerns about the pace of AI development and potential risks associated with the technology.

Anthropic Chief Executive Officer Dario Amodei called for AI companies to slow the development of increasingly advanced systems to allow greater understanding of the risks involved.

OpenAI Chief Executive Officer Sam Altman and xAI founder Elon Musk publicly supported the call.

The comments contributed to selling pressure on technology stocks across Asian markets, with SoftBank falling more than 10 per cent, while Kioxia and Advantest also recorded declines.

South Korea’s SK hynix and Samsung, as well as Taiwan Semiconductor Manufacturing Company, also traded lower.

The Kospi index in South Korea fell more than three per cent, while markets in Tokyo, Shanghai, Taipei, Wellington, Bangkok and Jakarta also recorded losses.

Analysts said the combination of higher oil prices, elevated bond yields and concerns about AI valuations had increased pressure on technology stocks.

However, they noted that the current decline appeared more likely to reflect investor sentiment and valuation concerns than a collapse in demand for AI technology.