Global markets reacted sharply on Tuesday as signs of easing tensions in the Middle East conflict triggered movements in oil, equities and transport sectors worldwide.
Oil prices slide
Oil prices fell steeply after US President Donald Trump suggested the Middle East war was “pretty much” over.
Both major crude benchmarks dropped by more than 10 per cent. The US benchmark West Texas Intermediate (WTI) declined to $85.29 a barrel, while Brent crude fell to $88.95 at around 0230 GMT.
US stocks surge
US equities rallied on the same comments, with all three major indices closing higher.
The Dow Jones Industrial Average ended the session up 0.5 per cent at 47,740.80, marking a swing of about 1,125 points from earlier losses during the day.
US signals easing of oil sanctions
Trump also said Washington would relax some oil-related sanctions to help stabilise energy markets.
“We’re also waiving certain oil-related sanctions to reduce prices,” he told reporters. The announcement follows earlier indications that the administration would roll back restrictions on Russian oil exports.
Asian markets rebound
Asian equities also advanced in early trading on Tuesday.
South Korea’s benchmark KOSPI surged more than five per cent, while Japan’s Nikkei 225 rose over three per cent before trimming some of its gains.
G7 weighs possible response
France’s finance minister said the Group of Seven was “not there yet” on releasing strategic oil reserves, though discussions were continuing as leaders assessed the economic fallout from the conflict.
G7 energy ministers are scheduled to meet later on Tuesday.
Transport and tourism disruptions
French President Emmanuel Macron said France and its allies were preparing a “defensive” mission aimed at reopening the Strait of Hormuz, a key global shipping route, as the conflict entered its second week.
Data from shipping tracker MarineTraffic analysed by AFP showed that several vessels operating in the Gulf or passing through the Strait of Hormuz have altered their tracking information to suggest links with China in an apparent attempt to avoid Iranian attacks.
Airlines have also been affected. Lufthansa and Air France extended cancellations of flights to several Middle Eastern destinations.
Global shipping giant MSC announced it was suspending certain export shipments from the Gulf because of the conflict, adding that “all affected cargo will be discharged ”.
Countries introduce early measures
Several governments have begun taking precautionary steps to manage fuel supplies and prices.
Croatia, Hungary, South Korea and Thailand imposed caps on fuel prices, while China asked major refiners earlier this month to halt exports of diesel and petrol.
Nigeria’s Dangote mega-refinery said it would prioritise domestic supply to prevent potential shortages.
In Japan, the Nikkei newspaper reported that authorities have asked operators of oil reserves to prepare for a possible release if necessary.
