Global financial markets faced renewed uncertainty on Thursday as doubts emerged over the stability of the Gulf ceasefire, pushing oil prices back towards $100 per barrel and stalling earlier stock market gains.
Reports indicated that the Strait of Hormuz, a critical route for Middle Eastern oil exports, has yet to fully reopen, with Iran asserting control and demanding tolls for safe passage. The situation raised fears of prolonged supply disruptions.
US President Donald Trump warned via social media that American forces would remain in the region until a lasting agreement is reached, adding that any violation could trigger a stronger military response. Meanwhile, Israel conducted its heaviest strikes in Lebanon since last month’s conflict with Hezbollah, reportedly killing over 250 people on Wednesday.
European and African crude oil prices climbed to record highs on Wednesday despite a sharp decline in futures after a US-Iran ceasefire was announced on Tuesday.
Traders cited ongoing supply concerns, especially for European and African crude barrels, with North Sea Forties crude reaching an all-time high of $146.43 per barrel on Thursday, according to LSEG data. Brent crude futures rose 3.5 per cent to $98 per barrel, while US WTI gained 4.6 per cent to $98.88.
Stock markets reflected cautious sentiment. The pan-European STOXX 600 fell 0.5 per cent after posting its biggest one-day gain since 2022 on Wednesday. In Asia, Japan’s Nikkei fell 0.7 per cent, South Korea’s Kospi dropped 1.6 per cent, and China’s CSI 300 eased 0.6 per cent. US futures for the S&P 500 and Nasdaq were down around 0.3 per cent.
Economic indicators pointed to persistent inflationary pressures. US PCE core prices for February rose 2.8 per cent year-on-year, while State Street’s PriceStats reported March as the largest month-on-month increase in prices since 2008. Analysts warned that rising oil prices, around 40 per cent above pre-conflict levels, could feed into higher inflation globally.
Bond yields also climbed, with US 10-year notes at 4.296 per cent, reflecting inflation fears and oil-driven market sentiment. Europe’s money markets continue to expect two ECB rate hikes this year. The dollar index hovered around 99, while the euro traded at $1.1681 and the yen slipped back above 159.
UBP’s Peter Kinsella noted the complexity of the situation: “Markets are reacting headline by headline. Investors are focused on oil, but volatility in other assets remains limited.”
