Oil prices declined and Asian equities rose on Tuesday amid market expectations that the US and Iran might resume negotiations before the ceasefire expires, despite Tehran's lack of commitment and mutual accusations of truce violations.
Brent crude fell 0.4 per cent to $95.09 a barrel, and US West Texas Intermediate dropped 1.7 per cent to $88.07, retreating after sharp gains in the previous session. Shipping through the Strait of Hormuz remains severely disrupted, with up to 10 million barrels per day of crude still shut in, pushing up freight and insurance costs.
The ceasefire is due to expire on Wednesday evening Washington time. US President Donald Trump said Vice President JD Vance would travel to Islamabad for talks, but Iran made no immediate commitment. Trump stated it was "highly unlikely" he would extend the truce without a deal, while Iran's parliament speaker rejected negotiations "under the shadow of threats".
Asian markets saw broad gains: South Korea's Kospi hit a record high, rising 2.1 per cent, Japan's Nikkei added 1.2 per cent, and MSCI's Asia-Pacific index outside Japan rose 0.9 per cent. However, Australian shares slipped 0.3 per cent and the Shanghai Composite lost 0.2 per cent.
The economic impact continued to widen, with Kuwait declaring force majeure on crude shipments and Saudi Arabia's Red Sea port loadings falling 17 per cent week on week. Meanwhile, US earnings season remained strong, with nearly nine in ten S&P 500 companies beating expectations.
The dollar index held steady at 98.08, and gold edged up 0.1 per cent. Investors also awaited a Senate confirmation hearing for Federal Reserve nominee Kevin Warsh.
