Fears that elevated inflation could force central banks to keep interest rates higher for longer, sparked by a surge in crude prices past the $101 per barrel mark, pushed Asian stocks lower on Wednesday, tracking a decline on Wall Street.

The MSCI Asia-Pacific index dropped as much as 1.3%, marking its steepest intraday fall in a week, with heavyweights including Taiwan Semiconductor Manufacturing Co (TSMC), Alibaba Group Ltd, and BHP Group Ltd leading the decline.

South Korea’s benchmark index shed as much as 2.2%, while other markets across the region, including Japan, Taiwan, and Hong Kong, also traded lower.

Yuting Shao, senior director of global macro strategy at Manulife Investment Management, noted that heading into the year-end, oil price volatility and risks stemming from recent geopolitical escalations are indeed among the key risk factors that markets must contend with.