Oil plunge rattles markets; stocks catch their breath amid Middle East developments

Global markets recorded notable volatility today as the war involving Iran, the United States, and Israel entered its twenty-sixth day. Brent crude prices retreated to $99.27 per barrel a decline of 4.95% while West Texas Intermediate (WTI) crude fell to $88.54 per barrel (-4.13%).

This decline follows Iran’s announcement that it would reopen the Strait of Hormuz to "non-hostile" vessels, as well as the U.S. administration’s presentation of a 15-point peace plan to Iran, which includes keeping the strait open for navigation.

The U.S. President reiterated his optimism regarding the possibility of reaching an agreement with Tehran, noting that Iran had offered a "major gift" concerning oil and gas, though he provided no details regarding its financial value.

Meanwhile, European stock indices rose; at the start of trading, the Paris index recorded a gain of 1.20%, Frankfurt 1.43%, and London 0.63%. In Asia, Tokyo’s Nikkei index closed up 2.9%, while the Shanghai Composite index rose 1.3%, and Hong Kong’s Hang Seng index continued its upward trend, gaining 0.5%.

Additionally, the U.S. dollar depreciated against the Japanese yen, falling to 159 yen, while gold rebounded by 2.79% to reach $4,562.59 per ounce.

Separately, Fatih Birol, Executive Director of the International Energy Agency (IEA), announced his readiness to release additional oil supplies "if necessary" during a meeting with the Japanese Prime Minister in Tokyo, in response to the impact of the war on energy prices.

Furthermore, French Minister of the Economy Roland Lescure warned of a "new oil shock" threatening economic growth, emphasizing that the current crisis is not temporary.

The National Institute of Statistics and Economic Studies (INSEE) clarified that French economic growth is expected to be weaker than previously forecast during the first and second quarters. ...starting in 2026, driven by rising fuel prices, alongside a projected slight increase in GDP of 0.2% for each of the two quarters.

These developments unfold under the close scrutiny of markets and investors, amidst the ongoing conflict in the Middle East and its direct impact on energy prices and global markets.

ANHA