Global oil prices experienced a decline while stock markets saw an uptick following U.S. President Donald Trump’s statement suggesting a possible resolution to the conflict with Iran. Trump indicated that should Iran agree to a deal with Washington, the longstanding tensions could cease, allowing the Strait of Hormuz to reopen for international passage. In a social media post, Trump mentioned that if Tehran consents to the terms previously discussed—though he acknowledged this could be a significant assumption—the conflict dubbed “Epic Fury” could conclude. He also noted that the ongoing blockade would then permit open access to the strait, benefitting all parties, including Iran.
Trump, however, cautioned that failure to reach an agreement would result in intensified military actions, warning, “the bombing starts” with heightened intensity. This development followed Trump’s decision to temporarily halt “Project Freedom,” a U.S. operation safeguarding vessels navigating the strategic waterway. The Strait of Hormuz, which facilitates nearly 20% of the world’s oil movement, had been obstructed by Iran since late February, contributing to a widespread energy crisis. Although the blockade on Iranian ports would persist, the temporary suspension aims to finalize a deal with Tehran.
Iran’s Revolutionary Guards’ Navy responded positively, asserting that with the cessation of U.S. threats, safe passage through the strait would be ensured under new procedures. This was Iran’s initial reaction to the U.S. pause in operations meant to assist stranded ships. Consequently, Brent crude oil prices, which had seen a 6% rise earlier in the week due to Middle Eastern tensions, plummeted by 11% to $97 a barrel, marking the first drop below $100 since April 22. Similarly, wholesale gas prices decreased, with the British June contract falling by 6.3%, while airline stocks surged due to improved prospects for international travel.
Despite the initial downturn, oil prices later regained some ground, with a 7.3% reduction to $101.83 a barrel as Iran dismissed the U.S. offer as merely an “American wishlist.” The Revolutionary Guards did not elaborate on their new procedures but expressed gratitude to shipowners and captains for complying with Iranian regulations within the strait. Recent weeks saw oil prices reach $126 a barrel, the highest since 2022, amid uncertainties surrounding the U.S. blockade’s duration and stalled peace negotiations.
European stock markets reacted positively on Wednesday, with the UK’s FTSE 100 index climbing 2%, France’s Cac 40 increasing by 3%, and Germany’s Dax gaining 2.1%. Additionally, MSCI’s All-Country World Index achieved a new record with a 1.6% rise, reflecting similar successes in its emerging markets benchmark and the Asia Pacific shares index outside Japan, which grew by 2.5%.