Oil prices dropped after Trump postponed Iran strikes, but stock markets fell as traders grew sceptical of White House messaging and feared prolonged conflict.
HONG KONG: Oil prices fell on Friday after US President Donald Trump again delayed a deadline for Iran to reopen the Strait of Hormuz. Most stock markets also dropped as traders reacted warily to the latest development in a series of conflicting messages from the White House.
Trump had initially threatened to destroy Iran’s energy sites if it did not unblock the crucial waterway within 48 hours. He later pushed that deadline back five days, citing positive peace talks that Tehran denied had taken place.
The president announced a further delay on Thursday, pausing the threatened strikes until April 6. “As per Iranian Government request… I am pausing the period of Energy Plant destruction by 10 Days,” Trump posted on his Truth Social platform.
He claimed talks were going “very well” despite Iranian denials. Trump later told a cabinet meeting Iran had allowed 10 oil tankers passage through the Strait of Hormuz to show seriousness.
The Iranian news agency Tasnim reported Tehran’s response to a US 15-point peace plan had been sent through intermediaries. It cited demands for an end to US-Israeli attacks, war reparations, and respect for Iran’s “sovereignty” over the strait.
Trump’s announcement coincided with a Wall Street Journal report that the Pentagon was considering sending up to 10,000 extra ground troops to the Middle East. Oil prices fell more than 1%, only partially paring the previous day’s surge.
Brent crude is up almost 50% since the conflict began on February 28. West Texas Intermediate has risen around 40% in the same period.
Equities struggled following hefty losses on Wall Street. Tokyo and Seoul were among the biggest losers in Asia, while Hong Kong, Sydney, and Manila also fell sharply.
Investors expressed growing scepticism about the White House’s messaging. “Time has been purchased, not clarity. And the market knows the difference,” said SPI Asset Management’s Stephen Innes.
National Australia Bank’s Ray Attrill noted the debatable status of the talks. “Whether peace talks are taking place between the US and Iran remains debatable,” he said.
The World Trade Organisation warned of the “worst disruptions in the past 80 years” to global trade. The World Bank said it was prepared to provide immediate financial assistance to emerging markets.
The OECD warned US inflation could hit more than 4% this year due to the oil price spike, up from a previous projection of 2.8%. Several Federal Reserve officials expressed concern about the economic outlook, suggesting interest rates would stay high.
Governments worldwide are being forced to act. Spain approved a sweeping USD 5.8 billion package including steep energy tax cuts.
Poland’s prime minister announced measures to address soaring fuel costs, including reduced taxes. South Korea said it will roll out a USD 17 billion “wartime” supplementary budget and expand fuel tax cuts.
