Oil prices rallied and stocks were mixed as markets reacted to a US ultimatum for Iran to reopen the Strait of Hormuz, a critical global oil chokepoint
HONG KONG: Oil prices rallied on Tuesday while global stock markets edged tentatively higher. Investors were assessing a stark ultimatum from US President Donald Trump, who threatened to decimate Iran’s civilian infrastructure if it did not reopen the strategic Strait of Hormuz.
Trump warned Tehran that “the entire country” could be taken out if his deadline to reopen the waterway by 0000 GMT Wednesday was not met. He detailed a plan where “every bridge in Iran will be decimated” and “every power plant” destroyed, brushing aside accusations such action would be a war crime.
The threat came after a social media post on Easter Sunday where he vowed Iran would be “living in Hell”. Tehran responded by warning it would retaliate by striking energy infrastructure in the Gulf if attacked.
Both main oil contracts rose sharply, with West Texas Intermediate hitting around $115, its highest in a month. Brent crude sat above $111 per barrel as the Middle East conflict entered its sixth week.
Equity markets fluctuated uneasily. Tokyo was flat while Shanghai, Sydney, Seoul, and major European bourses like London and Paris posted gains. Markets in Singapore, Mumbai, and Jakarta fell, with Hong Kong closed for a holiday.
“Financial markets are oscillating in a narrow, uneasy range as traders sized up the countdown to Donald Trump’s Iran deadline,” wrote Stephen Innes of SPI Asset Management. He noted traders were conditioned to expect de-escalation just before the edge.
The Strait of Hormuz is a vital passage for about a fifth of the world’s crude oil and gas. The ongoing disruption has forced governments worldwide to unveil economic support measures amid fears of another inflation spike.
In economic data, the Philippines reported inflation jumped to a forecast-topping 4.1% in March, its highest level in nearly two years. This follows recent US data showing cooling services activity as companies braced for higher energy costs.
In corporate news, Samsung shares rallied around 1%. The tech giant estimated its first-quarter profit soared 755% to an all-time high of $37.9 billion, driven by strong sales of AI-critical chips.
