Hong Kong (AFP) – Oil prices fell Friday after Donald Trump again pushed back a deadline for Iran to reopen the Strait of Hormuz. However, most equities also dropped as traders shrugged at the news following a series of conflicting messages from the White House.
The US president had warned last Saturday that he would obliterate the Islamic republic’s energy sites if it did not unblock the crucial waterway within 48 hours, but he pushed that deadline back five days, citing positive peace talks, which Tehran denied had taken place. After days of strikes by both sides and mixed reports on negotiations—including the trading of multi-point demands—Trump 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 stated.
Trump had earlier denied he was desperate for a deal to end the war, despite the Islamic republic’s cool response to an American peace plan and fears that a spike in oil prices would fan inflation. Later, in a cabinet meeting, Trump mentioned that Iran had allowed 10 oil tankers passage through the Strait of Hormuz—through which about a fifth of the world’s oil and gas pass—to indicate its seriousness about talks. The Iranian news agency Tasnim reported that Iran’s response to Washington’s 15-point plan to end the war “was officially sent last night through intermediaries, and Iran is awaiting the other side’s response.”
This report, citing an unnamed official, said that officials had called for an end to US-Israeli attacks on Iran and Tehran-backed groups elsewhere in the region. Additionally, it called for war reparations and for Iran’s “sovereignty” over the Strait of Hormuz to be respected. However, Trump’s announcement coincided with a report from the Wall Street Journal, which cited Department of Defense officials indicating that the Pentagon was considering sending as many as 10,000 extra ground troops to the Middle East.
Oil prices fell more than one percent on Friday, though that only partially pared the previous day’s surge amid growing anxiety that the conflict will last much longer than initially thought. Brent is up almost 50 percent since the war began on February 28, while West Texas Intermediate has risen around 40 percent.
Equities struggled following hefty losses on Wall Street. Tokyo and Seoul, which had been standout performers in the first two months of the year, were among the biggest losers, while Hong Kong, Sydney, Wellington, Taipei, Jakarta, and Manila were also sharply lower. Shanghai and Singapore fluctuated. Investors are becoming increasingly skeptical about the messaging from the White House, with Trump frequently flipping between threats and talks of peace.
“A ten-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.” National Australia Bank’s Ray Attrill commented, “Whether peace talks are taking place between the US and Iran remains debatable, as Iran insists that exchanges of letters via a friendly intermediary (presumed to be Pakistan) do not constitute talks.”
Meanwhile, the World Trade Organization warned that the global trading system was experiencing the “worst disruptions in the past 80 years,” while the World Bank stated it was prepared to provide immediate financial assistance to emerging market countries. This came alongside a warning from the Organization for Economic Cooperation and Development that US inflation could surpass four percent this year due to the crude price spike, a significant increase from its earlier projection of 2.8 percent.
The prospect of another spike in the cost of living led several Federal Reserve officials to express concern about the outlook for the world’s top economy and suggested that interest rates were unlikely to decrease any time soon. As the economic impact worsened, governments worldwide were compelled to act. Spain approved a sweeping $5.8 billion package, including steep cuts to energy taxes, while Poland’s prime minister announced measures to address soaring fuel costs, including reduced taxes and price ceilings. South Korea also announced it would roll out a $17 billion “wartime” supplementary budget and expand fuel tax cuts.
– Key figures at around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.9 percent at 53,145.33
Hong Kong – Hang Seng Index: DOWN 0.3 percent at 24,787.31
Shanghai – Composite: FLAT at 3,888.09
West Texas Intermediate: DOWN 1.5 percent at $93.07 a barrel
Brent North Sea Crude: DOWN 1.8 percent at $106.12 a barrel
Euro/dollar: UP at $1.1537 from $1.1523 on Thursday
Pound/dollar: UP at $1.3339 from $1.3313
Dollar/yen: DOWN at 159.58 yen from 159.83 yen
Euro/pound: DOWN at 86.50 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
