Oil prices plunged and stock markets rebounded after Donald Trump said the US and Iran had held talks over halting the conflict in the Middle East.
After the US president’s statement on Truth Social, the price of Brent crude sank initially, while European and US shares rose.
Trump said the US and Iran spoke about a “COMPLETE” resolution and he would postpone strikes against Iranian power plants for five days, but Iranian state-affiliated media said Tehran had not spoken to the US.
On Saturday, Trump said he would “obliterate” Iranian power plants if the key Strait of Hormuz shipping route was not reopened in 48 hours. Iran had said it would respond by targeting key infrastructure in the region.
The comments over the weekend had rattled financial markets, adding to fears that the US-Israeli war with Iran would be a prolonged conflict.At one point on Monday, the price of Brent had hit $113 a barrel, but it tumbled in the immediate aftermath of Trump’s latest comments. It fell to a low of $96 a barrel, before rebounding to $103.
While oil fell, stocks rose. London’s FTSE 100 index was up 0.3% having being down more than 2% earlier on Monday.Germany’s Dax index also rebounded to stand 1.7% higher while France’s Cac was up 1.2%.
In the US, both the S&P 500 index and the Dow Jones opened up about 2%.
Stocks in Asia, which closed before Trump’s latest comments, had seen heavy falls with Japan’s Nikkei index dropping 3.5% and South Korea’s Kospi down 6.5%.
Japan and South Korea have been particularly affected by the conflict, as they are heavily dependent on oil and gas that would normally pass through the Strait of Hormuz, one of the world’s busiest oil shipping channels.
Since the war began on 28 February, Iran has effectively blocked the waterway. About 20% of the world’s oil and liquefied natural gas usually passes through the strait – and the conflict has sent global fuel prices soaring.
In a post on Truth Social, Trump said that over the past two days the US and Iran have had “VERY GOOD AND PRODUCTIVE” talks over “A COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES”.
He added he had told the Department of War to postpone any military strikes “AGAINST IRANIAN POWER PLANTS AND ENERGY INFRASTRUCTURE FOR A FIVE DAY PERIOD, SUBJECT TO THE SUCCESS OF THE ONGOING MEETINGS AND DISCUSSIONS”.
Source :BBC
