Oil prices tumbled and stock markets surged after US President Donald Trump said the war with Iran would end and the Strait of Hormuz would be 'open to all' if Tehran agreed to a deal. Brent crude fell as much as 11% to below $100 a barrel for the first time since April, while wholesale gas prices also dropped.
Trump posted on social media that if Iran accepts what has been agreed, 'the already legendary Epic Fury will be at an end, and the highly effective Blockade will allow the Hormuz Strait to be OPEN TO ALL, including Iran.' However, he warned that if no deal is struck, 'the bombing starts' at a much higher intensity.
The president said he would briefly pause the 'Project Freedom' operation escorting ships through the strait, which has been blockaded by Iran since late February, to finalise a deal. Iran's Revolutionary Guards Navy responded by stating that safe transit would be ensured with US threats ending and new procedures in place.
European markets rallied, with the FTSE 100 rising 2%, France's Cac 40 climbing 3%, and Germany's Dax up 2.1%. MSCI's All-Country World Index hit a new record, led by a 6.6% surge in South Korea's Kospi. On Wall Street, the S&P 500 rose nearly 1.5%.
However, oil pared losses later in the day amid Iranian dismissals of the deal as an 'American wishlist'. The price of Brent crude settled 7.3% lower at $101.83 a barrel. Meanwhile, French shipping group CMA CGM reported an attack on one of its vessels in the strait, injuring crew members.
