Bangkok, Jun 23 (AP) Global markets appeared to take the US strike against nuclear targets in Iran in stride as the price of oil initially jumped more than 2% but fell back slightly on Monday. US stock futures and Asian shares declined.

Investors were watching to see how Iran reacts, analysts said, while the US military's strike on three Iranian sites raised urgent questions about what remains of Tehran's nuclear program.

"I believe what we are thinking is or the thinking is that it is going to be a short conflict. The one big hit by the Americans will be effective and then we'll get back to sort of business as usual, in which case there is no need for an immediate, panicky type of reaction,” said Neil Newman, managing director of Atris Advisory Japan.

The price of Brent crude oil, the international standard, was up 2% at $78.52 a barrel. US crude also jumped, gaining 2% to $75.34 a barrel by midday Monday in Asia.

The attacks Saturday raised the stakes in the war between Israel and Iran, and futures for the S&P 500 and the Dow Jones Industrial Average slipped 0.3%, while Nasdaq futures fell 0.5%. Treasury yields were little changed.

The conflict began with an Israeli attack against Iran on June 13 that sent oil prices yo-yoing and rattled other markets.

Iran is a major producer of oil and also sits on the narrow Strait of Hormuz, through which much of the world's crude passes. Closing off the waterway would be technically difficult to pull off but it could severely disrupt transit through it, sending insurance rates spiking and making shippers nervous to move without U.S. Navy escorts “The situation remains highly fluid, and much hinges on whether Tehran opts for a restrained reaction or a more aggressive course of action,” Kristian Kerr, head of macro strategy at LPL Financial in Charlotte, North Carolina, said in a commentary.

Iran may be reluctant to close down the waterway because it uses the strait to transport its own crude, mostly to China, and oil is a major revenue source for the regime.

“It's a scorched earth possibility, a Sherman-burning-Atlanta move,” said Tom Kloza, chief market analyst at Turner Mason & Co. "It's not probable.” Kloza thinks oil futures will ease back down after initial fears blow over.

Ed Yardeni, a long-time analyst, agreed, writing in a report that Tehran leaders would likely hold back.

“They aren't crazy,” he wrote in a note to investors Sunday. “The price of oil should fall and stock markets around the world should climb higher.” Other experts aren't so sure.

Andy Lipow, a Houston analyst covering oil markets for 45 years, said countries are not always rational actors and that he wouldn't be surprised if Tehran lashed out for political or emotional reasons.

“If the Strait of Hormuz was completely shut down, oil prices would rise to $120 to $130 a barrel,” said Lipow, predicting that that would translate to about $4.50 a gallon at the pump and hurt consumers in other ways.

“It would mean higher prices for all those goods transported by truck, and it would be more difficult for the Fed to lower interest rates.” In Asian trading early Monday, Taiwan's Taiex fell 1.3% while the Kospi in South Korea initially lost 1% but then regained some lost ground to be down 0.4%. Much of East Asia relies heavily on oil imported through the Strait of Hormuz.

In Tokyo, the Nikkei 225 edged 0.1% lower, to 38,366.53, as losses for most shares were offset by gains for defense oriented stocks. Mitsubishi Heavy Industries climbed 0.8% and ShinMaywa Industries, another major weapons maker, surged 1.5%.

“The US strike on Iran certainly is very good for defence equipment,” Newman of Atris Advisory said, noting that both Japan and South Korea have sizable military manufactoring hubs.

Australia's S&P/ASX fell 0.4% to 8,470.10.

Hong Kong's Hang Seng lost 0.1% to 23,498.82, while markets in mainland China advanced. The Shanghai Composite index picked up 0.2% to 3,365.07.

In currency dealings, the U.S. dollar rose to 146.90 Japanese yen from 146.66 yen. The euro climbed to $1.1496 from $1.1473. (AP) NSA NSA