Oil Climbs, Stocks Slide as Iran War Uncertainty Reigns
New York: Oil prices rose and stocks fell on Thursday as US President Donald Trump threatened to “destroy” the country even as he claimed negotiations were ongoing to end the conflict.
Earlier this week, Trump said that attacks targeting Iran’s energy infrastructure would be postponed and that the two sides were in peace talks, which revived the markets.
But uncertainty over the talks, ongoing strikes by all parties to the conflict and the virtual closure of the Strait of Hormuz, through which around 20 percent of oil and liquefied natural gas normally pass, have cast a shadow over market sentiment.
Trump on Thursday said Iran had allowed 10 oil tankers to pass through the waterway as a “gift” and pushed back a deadline for attacks on Iranian power plants to April 6.
His comments about postponing the strikes came after the US close as oil lost major gains made during the day.
Earlier, Brent crude oil rose 5.7 percent to close at $108.01 per barrel, and West Texas Intermediate rose 4.6 percent to close at $94.48.
Kim Forrest, chief investment officer of Bokeh Capital Partners, said the battle is for “really nervous investors.”
“There’s only one or two stories that drive stocks every day, and everything else falls from there. So when they get demoralized, it’s going to be a big, bad selling day.”
While Wall Street’s main stock indexes were down, Nasdaq was in the red, losing 2.38 percent. European and Asian markets also ended with losses.
“When the oil price rises, the market’s tactics remain the same: stocks and bonds sell,” said Kathleen Brooks, director of research at XTB.
Yields on government bonds generally rose.
Deutsche Bank’s Jim Reid said conflicting messages from the US and Iran “raise questions about whether there will actually be a move out of the conflict in the coming days.”
– Competitor plans –
Washington was said to have presented a 15-point plan to end the war. Tehran’s state television reported that officials put forward their own five conditions for an end to hostilities.
Trump on Thursday said seizing control of Iran’s oil was an option, as Washington did after ousting the Venezuelan leader in a military operation.
Pakistani Foreign Minister Ishaq Dar confirmed on Thursday that indirect negotiations are being held between the US and Iran, with Islamabad used as an intermediary.
“Pressure on energy prices, shipping flows and broader financial conditions remains one of the few meaningful sources of leverage Iran retains,” said Charu Chanana of Saxo Markets.
“There is therefore little incentive to give up this leverage prematurely, especially if market stress strengthens the negotiating position,” he added.
The OECD lowered its euro zone growth outlook on Thursday and forecast higher inflation for 2026 as energy prices soar.
The conflict has also weighed on German consumer confidence heading into April, adding to the woes facing Europe’s leading economy, a survey showed on Thursday.
France, which holds the G7 Presidency, will host a meeting on Monday that will bring together the group’s finance ministers, energy ministers and central bank governors.
