Oil prices fell sharply and Asian stock markets rallied this morning amid hopes of a peace deal that could bring an end to the US-Israel war with Iran.
Brent crude dropped 5.5% to $97.90 a barrel, while US-traded crude fell 5.9% to $90.93 after US President Donald Trump said an agreement with Tehran had been “largely negotiated”.
The Strait of Hormuz, which carries around a fifth of global oil and LNG supplies, has effectively been closed since the conflict began on 28 February. Trump suggested any deal would include reopening the key shipping route.
Japan’s Nikkei 225 rose 3% to a record high on expectations the strait could soon reopen, easing pressure on energy-importing economies across Asia.
Posting on social media, Trump said he had a “very good call” with Gulf leaders regarding a “Memorandum of Understanding pertaining to PEACE”.
“An agreement has been largely negotiated, subject to finalization between the United States of America, the Islamic Republic of Iran, and the various other Countries, as listed,” he said.
However, Trump later urged negotiators not to rush the process, writing: “Both sides must take their time and get it right. There can be no mistakes!”