Oil Rebounds to $100 After US Strikes Shatter Iran War Hopes

Oil prices rebounded to $100 on Tuesday, while global stock markets were mixed and the dollar strengthened after US military strikes on Iran dashed hopes for a near-term deal to reopen the Strait of Hormuz. (Reuters)

Washington and Tehran had been working toward an agreement to end the Middle East conflict and restore tanker and cargo traffic through the vital waterway following a fragile ceasefire reached on April 8.

However, fresh US strikes prompted Tehran to warn of retaliation, accusing Washington of violating the truce after the US Central Command described the attacks as “self-defence strikes”.

Markets had rallied on Monday and crude futures slipped below $100 a barrel amid reports that a deal could be reached within days.

That optimism faded after US forces said they had targeted missile sites in southern Iran and vessels allegedly attempting to lay mines.

Brent crude, the global benchmark, surged nearly 4.5% on Tuesday to climb back above $100 a barrel. (The Guardian)

Before the latest escalation, gains in oil prices had been relatively limited, “highlighting the market’s strong belief that the Strait of Hormuz will reopen,” said Arne Lohmann Rasmussen, commodities analyst at Global Risk Management.

Equity markets showed mixed performances, with the Dow Jones slightly lower while the Nasdaq and S&P 500 traded in positive territory during afternoon trading.

In Europe, Frankfurt and Paris closed down about one percent, while London edged up 0.2% as traders returned from a long holiday weekend.

Shares of BP led losses in London, dropping more than four percent after the company abruptly removed chairman Albert Manifold just months into his tenure, citing “serious concerns” over governance, oversight, and conduct.

Kathleen Brooks, research director at XTB, said Manifold’s departure — coming less than three years after former CEO Bernard Looney stepped down amid misconduct allegations — signalled instability within the company and was negative for shareholders.

AJ Bell investment director Russ Mould said persistent uncertainty over a potential Iran deal and the overnight US strike had tempered market optimism, echoing Brooks’ concerns.

The strikes came as senior Iranian negotiators arrived in Doha for another round of talks aimed at ending the three-month conflict, while Israel intensified operations against Hezbollah in southern Lebanon.

In Asia, Seoul’s stock market climbed to a record high above 8,000 points, driven by strong performances from chipmakers, automakers, and shipbuilders.

Meanwhile, shares in Ferrari slid 6% after investors reacted negatively to the unveiling of the luxury carmaker’s first electric vehicle.