Hong Kong (AFP) – Oil prices and stocks were mixed Friday as early optimism fuelled by Donald Trump’s decision to again push back a deadline for Iran to reopen the Strait of Hormuz petered. The tepid response came as governments around the world looked to shore up their economies against surging energy costs and the Organization for Economic Cooperation and Development (OECD) warned US inflation would top four percent.
The US president warned last Saturday he would strike the Islamic republic’s energy sites if it did not unblock the crucial waterway within 48 hours, but pushed that back five days citing positive peace talks, which Tehran denied had taken place. But after days of attacks by both sides and mixed reports of negotiations — including the exchanging of multi-point demands — he announced Thursday that he would again delay the attacks to April 6 after a request from Tehran.
“Talks are ongoing and, despite erroneous statements to the contrary by the Fake News Media, and others, they are going very well,” Trump posted on his Truth Social platform. “As per Iranian Government request…I am pausing the period of Energy Plant destruction by 10 Days to Monday, April 6, 2026, at 8 P.M., Eastern Time,” he posted. Trump earlier denied he was desperate for a deal to end the war, despite Tehran’s cool response to an American peace plan and fears the oil spike would fan inflation.
Trump later told a cabinet meeting Iran had allowed 10 oil tankers passage through the Strait of Hormuz — through which about a fifth of world oil and gas pass — to show it was serious about talks. Iran’s Tasnim news agency said the country’s response to Washington’s 15-point plan to end the war “was officially sent last night through intermediaries”. The report, citing an unnamed official, said officials had called for an end to US-Israeli attacks on Iran and Tehran-backed groups elsewhere in the region. It also called for war reparations and Iran’s “sovereignty” over the Strait of Hormuz to be respected.
However, Trump’s announcement came as the Wall Street Journal cited Department of Defense officials as saying the Pentagon was considering sending up to 10,000 extra ground troops to the Middle East. Oil prices initially fell more than one percent Friday but were mixed in late Asian trade, having tumbled Thursday. Brent is up almost 50 percent since the war began on February 28, while West Texas Intermediate has risen around 40 percent.
Shares in Tokyo, Seoul, Sydney, Wellington, Taipei, Mumbai, Jakarta, and Manila were sharply lower, but Hong Kong, Shanghai, Singapore, and Bangkok rose. Investors are increasingly sceptical about the messaging from the White House, with Trump often flipping between threats and talk of peace. “A 10-day extension sounds like breathing room, but in market terms, it feels more like a trader rolling a losing position forward, hoping the next candle delivers what the last one refused to give,” said SPI Asset Management’s Stephen Innes, referring to an investors’ analysis tool. “Time has been purchased, not clarity. And the market knows the difference.”
The World Trade Organisation warned the global trading system was experiencing the “worst disruptions in the past 80 years,” while the World Bank said it was prepared to provide immediate financial assistance to emerging market countries. That came as the OECD warned US inflation could hit 4.2 percent this year as a result of the spike in crude prices. That compares with its previous projection of 2.8 percent. And several Federal Reserve officials expressed concern about the outlook for the world’s top economy and suggested interest rates were unlikely to come down any time soon.
Meanwhile, Australian oil and gas giant Woodside said a third major LNG processing plant in the country had closed as a cyclone approached. With the crisis continuing to cause havoc, governments around the world have unveiled a range of support measures. Vietnam temporarily waived an environmental levy on fuel to cut petrol prices by more than a quarter, India said it had lowered fuel taxes, and Japan plans to temporarily lift restrictions on coal-fired power plants in a bid to ease an energy crunch. Spain, Poland, and South Korea earlier this week announced support plans that included fuel tax cuts.
– Key figures at around 0700 GMT –
Tokyo – Nikkei 225: DOWN 0.4 percent at 53,373.07 (close)
Hong Kong – Hang Seng Index: UP 0.6 percent at 25,006.90
Shanghai – Composite: UP 0.6 percent at 3,913.72 (close)
West Texas Intermediate: DOWN 0.4 percent at $94.14 a barrel
Brent North Sea Crude: UP 0.1 percent at $108.10 a barrel
Euro/dollar: UP at $1.1537 from $1.1523 on Thursday
Pound/dollar: UP at $1.3335 from $1.3313
Dollar/yen: DOWN at 159.73 yen from 159.83 yen
Euro/pound: DOWN at 86.51 pence from 86.55 pence
New York – Dow: DOWN 1.0 percent at 45,960.11 (close)
London – FTSE 100: DOWN 1.3 percent at 9,972.17 (close)
© 2024 AFP
