Asian shares declined on Thursday, mirroring a downturn on Wall Street, as crude oil prices climbed back above $100 a barrel amid ongoing geopolitical tensions. U.S. stock futures showed modest gains.

Brent crude experienced a significant jump of 3.4% on Wednesday, surpassing the $100 mark for the first time since July. While it saw a slight pullback early Thursday to approximately $101 a barrel, the price remains elevated. Reports suggest that recent confrontations between the U.S. and Iran are disrupting oil flow through the Strait of Hormuz. U.S. President Donald Trump indicated that oil prices might not decrease until after the U.S. midterm elections.

In Asian trading, Tokyo's Nikkei 225 lost 0.8%, South Korea's Kospi declined 0.9%, Hong Kong's Hang Seng fell 1.4%, and the Shanghai Composite gave up 0.3%. Australia's S&P/ASX 200 slipped 1.5%, and Taiwan's Taiex fell 0.8%.

On Wednesday, the S&P 500 index dropped 0.5%, the Dow Jones Industrial Average fell 0.8%, and the Nasdaq composite lost 0.6%. All three major U.S. indexes are on track for a weekly loss.

The surge in oil prices has been a significant factor influencing Wall Street activity. The U.S. reportedly destroyed five Iranian tankers on Tuesday amidst a series of exchanges between the two nations. The conflict, which began in February, has significantly impacted maritime traffic in the Strait of Hormuz, a critical chokepoint for global oil supply.

Retail stocks were among those contributing to the market's decline, with Amazon falling 1.8%, Starbucks losing 1.9%, and Home Depot dropping 1%. The energy sector was the sole exception within the S&P 500, experiencing gains as oil companies benefited from the price increase. Exxon Mobil rose 2.2%, and Chevron added 1.9%.

The sustained rise in oil prices has contributed to broader inflation, increasing the cost of gasoline in the U.S. by approximately 32% compared to the previous year, reaching an average of $4.22 per gallon. Higher fuel costs directly affect household budgets and indirectly increase the prices of goods due to elevated shipping expenses. The price of diesel, crucial for shipping and production, reached an all-time high on Friday and has continued to climb, averaging $5.94 per gallon overnight.

Inflation was already a persistent issue before the conflict intensified, exacerbated by existing trade disputes. Further insights into business-level pricing will be available with the release of the Producer Price Index for August on Thursday, followed by the Consumer Price Index for August on Friday, which directly reflects household price impacts.

Both reports are anticipated to indicate that inflation rates remain above the Federal Reserve's target of 2% and above 3%.

In other market news, Meta Platforms saw its shares increase by 6.6% after launching a personal artificial intelligence agent. In the bond market, rising Treasury yields continued to pressure stocks. The U.S. Treasury Department announced it would buy back up to $6 billion in long-term debt, following a plan previewed in August to manage rising yields that increase borrowing costs for U.S. companies and affect other investments.

Early Thursday, the U.S. dollar saw a slight decrease against the Japanese yen and a small increase against the euro.