Oil Prices Fall and Markets Recover After Trump Claims US-Iran Talks Underway
Global financial markets moved dramatically on Monday as US President Donald Trump said the United States and Iran had held talks aimed at resolving the ongoing conflict that has disrupted oil flows through the Strait of Hormuz since late February.
The announcement, posted on Truth Social, sent oil prices sharply lower and lifted stock markets across Europe and the United States after days of heavy selling driven by fears of a prolonged military escalation.
What Trump Said
In his post, Trump said the two countries had engaged in what he described as highly productive discussions aimed at a complete resolution of hostilities. He also stated he had instructed the Department of War to delay any planned strikes on Iranian power plants and energy infrastructure for five days, pending the outcome of those discussions.
The statement followed remarks Trump made over the weekend in which he threatened to destroy Iranian power plants if the Strait of Hormuz was not reopened within 48 hours. Iran had said it would respond by targeting key infrastructure across the region.
Iran’s foreign ministry subsequently denied that any contact between the two governments had taken place, directly contradicting Trump’s account.
How Stock Markets Responded
Oil prices moved sharply in both directions. Brent crude had reached $113 a barrel earlier on Monday before Trump’s post was published. It then fell to a low of $96 a barrel in the immediate aftermath, though it recovered to trade around $103 as the day progressed.
European equity indexes, which had opened lower, reversed course following the announcement. London’s FTSE 100 turned from a decline of more than 2% to a gain of 0.3%. Germany’s DAX rose 1.7% and France’s CAC 40 added 1.2%. In the United States, both the S&P 500 and the Dow Jones Industrial Average opened approximately 2% higher.
Asian markets, which closed before Trump’s comments were published, had already absorbed significant losses. Japan’s Nikkei fell 3.5% and South Korea’s KOSPI declined 6.5%. Both countries are heavily dependent on oil and gas that flows through the Strait of Hormuz, making them particularly exposed to disruptions in that shipping lane.
Uncertainty Remains
Analysts urged caution in reading too much into the market recovery. Susannah Streeter, chief investment strategist at Wealth Club, said Trump’s comments had taken markets on a wild ride, and warned that placing too much weight on the president’s statements carried meaningful risk given how expectations had shifted repeatedly over the past four weeks.
Streeter also noted that with oil still trading above $100 a barrel, energy costs remain a significant burden for businesses and consumers alike. She added that traders appeared to anticipate reduced oil flows from the region even in the event of a ceasefire, given ongoing damage to supply infrastructure and disruption to shipping routes.
The Strait of Hormuz is one of the world’s most important energy transit points. Roughly 20% of global oil and liquefied natural gas supply typically passes through the waterway. Since the conflict began on 28 February, Iran has effectively closed the strait, contributing to a sustained rise in global fuel prices.
The conflicting statements from Washington and Tehran left the underlying situation unresolved, and markets were expected to remain sensitive to any further developments.
