Oil slides, stock markets take a hop on Trump's Iran reprieve

Oil prices tumbled and European stock markets rebound in volatile trading as US President Donald Trump suddenly ordered a halt to strikes on Iranian energy infrastructure

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Global stocks rebounded from a four-month low on Monday after US President Donald Trump announced he would order the military to postpone any strikes against Iranian power plants and energy infrastructure, easing fears over the repercussions of a deeper oil shock.

The comments came hours ahead of a deadline that threatened further escalation in the conflict, now in its fourth week. Trump added in a post on his Truth Social platform that the US and Iran had had “VERY GOOD AND PRODUCTIVE” conversations over the past two days about a “COMPLETE AND TOTAL RESOLUTION OF HOSTILITIES IN THE MIDDLE EAST”.

Oil prices tumbled by more than 8%, the dollar fell against other major currencies and government borrowing costs also eased. “The market woke up to some potentially good news out of the Middle East on Monday. But follow-through on any relief rally will likely require tangible follow-through on the geopolitical front,” said Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley.

Trump said the postponement followed productive conversations with Iran. But Iran’s Tasnim news agency, citing an Iranian official, said that the Strait of Hormuz would not return to prewar conditions and energy markets would remain unsettled, adding that no negotiations with the US were under way.

US crude fell 8.58 to $89.80 a barrel and Brent fell to $101.89 per barrel, down 9.14% on the day.