Asian bonds recorded their largest monthly foreign outflows in four years in March as disruptions to oil and ​gas supplies from the Middle East conflict fueled inflation ‌concerns, weighing on demand for fixed-income assets.

Investors pulled a net $7.57 billion from regional bonds in South Korea, Thailand, Malaysia, India and Indonesia last ​month, marking the largest monthly outflows since March 2022, ​according to data from local regulators and bond market ⁠associations.

"Investors are paring bond positions on worries that the ​inflation outlook is reducing the attractiveness of holding long-duration assets," said ​Khoon Goh, head of Asia research at ANZ.

Brent crude futures rose about 5.4% to $95.29 a barrel on Monday on concerns that a ceasefire ​between the United States and Iran may not hold, after ​Washington said it had seized an Iranian cargo ship that attempted to breach ‌its ⁠blockade and Tehran vowed retaliation.

"The longer energy prices remain elevated and the Strait (of Hormuz) is constrained, the greater the chances that higher inflation gets embedded across a wide variety of ​goods and services," said ​Federal Reserve Governor ⁠Christopher Waller on Friday.

South Korean bonds faced a net $7.25 billion foreign outflow last month as ​worries over rising oil prices outweighed optimism over ​the inclusion ⁠of local government bonds into the FTSE Russell's World Government Bond Index (WGBI) starting April.

Foreign investors also ditched $1.8 billion and $708 million of ⁠Indonesian ​and Thai bonds, respectively.

Malaysian and Indian ​bonds, however, saw cross-border inflows of $1.52 billion and $671 million, respectively, last month.