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Brent crude falls 5% as Trump calls off Iran strike plans
West Texas Intermediate slid more than $5 to $79.47 a barrel, while the Stoxx 600 rose 0.4% in early trading.
Oil prices dropped sharply and European equities moved higher after Donald Trump said planned strikes on Iran were called off so negotiations for a Middle East peace deal could resume, the Guardian Economics reported. Brent crude was down 5% to $83.50 a barrel by mid-morning after falling as low as $81.55, while US West Texas Intermediate fell more than $5 to $79.47.
The report said both benchmarks jumped by more than 20% in July as fighting between the US and Iran resumed and renewed tanker attacks in the Strait of Hormuz raised concerns about ship safety. Trump said Iran and other Middle Eastern countries asked for time to complete a deal tied to reopening the strait and ending Iran’s nuclear threat, and he said talks would start on Monday.
Kathleen Brooks, research director at broker XTB, said the oil decline should help markets by easing inflation fears and potentially dampening bond yield pressure, particularly at the long end. She noted 30-year US Treasury yields rose sharply last week to their highest level in 19 years.
In Europe, the pan-European Stoxx 600 index rose 0.4% at the start of August, with energy stocks down 2% and travel and leisure shares up 2.1%. The article also cited shipping data showing traffic in the Strait of Hormuz slowed after reported vessel attacks, and it said Opec+ agreed to raise production by about 188,000 barrels a day from September while unwinding output cuts.
Latest closeWTI crude $86.80 ▲3.8%|Brent $90.12 ▲1.2%