Trump’s call to pause strikes in Iran boosts markets
Global markets leaped on news that President Trump paused strikes on Iranian infrastructure as he hinted that negotiations had been “very good and productive”.
Brent crude – the international benchmark for oil prices – plunged back to below $100 per barrle after having jumped to $112 earlier in the day.
The FTSE 100 also rose into the green while the two-year gilt yield fell to around 4.4 per cent, having hit 4.75 per cent earlier in the day.
This followed a post by Trump on TruthSocial that Iran and the US had worked towards a “complete and total resolution” of the war in the Middle East.
Trump wrote in capital letters: “Based on the tenor and tone of these in-depth, detailed, and constructive conversations, witch [sic] will continue throughout the week, I have instructed the Department of War to postpone any and all military strikes against Iranian power plants and energy infrastructure for a five day period, subject to the success of the ongoing meetings and discussion.”
On Sunday, Trump had issued a major ultimatum calling for the full re-opening of the Strait of Hormuz with the warning that Iran would see its power plants “obliterated”.
Iran’s regime has pushed back, insisting the crucial waterway – which enables the flow of around a fifth of the world’s oil supply – remained open to “all except those who violate our soil”.
The regime’s revolutionary guards added that the strait would “be completely closed and will not be opened until our destroyed power plants are rebuilt” should Trump strike.
Market analysts will look to figure through what Trump’s post will mean for trading flows across the Strait of Hormuz.
Trump hints at end to war
Government officials in the UK remained worried about higher energy prices.
The Prime Minister’s spokesman said any reports of productive talks were “welcome” and supported a de-escalation in the conflict.
Sir Keir Starmer will chair an emergency Cobra meeting with the Chancellor, foreign secretary, energy secretary and Bank of England governor today as the heightened tensions threaten to deepen the energy crisis.
He told broadcasters on Monday morning that he would look to use “every lever” to protect households from higher inflation.
The Prime Minister spoke with Trump in a call on Sunday night to discuss ways to ease the global energy shock.
A Downing Street spokesperson said the the situation in the Middle East, “in particular, the need to reopen the Strait of Hormuz to resume global shipping”, was on the docket for conversation.
“They agreed that reopening the Strait of Hormuz was essential to ensure stability in the global energy market,” the spokesperson said, adding that they “agreed to speak again soon”.