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Oil prices fell sharply and global stock markets climbed after reports suggested that Donald Trump had sent a 15-point peace proposal to Iran, raising optimism about a possible ceasefire in the Middle East.
In early Wednesday trading, Brent crude dropped by around 4%, slipping below $100 per barrel and reaching a low of $97.57. The decline was driven by expectations that easing tensions could restore oil supply flows disrupted by the ongoing conflict.
Asian stock markets reacted positively to the news. Japan’s Nikkei surged by 2.9%, while India’s S&P BSE Sensex rose nearly 2%. Hong Kong’s Hang Seng index also posted gains of just under 1%.
European markets followed suit, opening higher. London’s FTSE 100 gained close to 1%, Germany’s DAX climbed 1.8%, and France’s CAC 40 rose by 1.5%, reflecting improved investor sentiment worldwide.
However, the relief in oil markets proved short-lived. Prices began to rise again after mixed signals emerged regarding the status of negotiations. Tehran denied that any discussions had taken place since the start of recent military actions, casting doubt on the peace prospects.
Adding to market uncertainty, Iran’s effective closure of the strategically vital Strait of Hormuz has severely disrupted global oil and gas shipments. The International Energy Agency described the situation as the largest oil supply disruption in history.
In response, over 30 countries—including the UAE, UK, France, Germany, Canada, and Australia—have pledged to cooperate on efforts to secure the crucial shipping route.
Meanwhile, gold prices have also shown volatility. Traditionally viewed as a safe-haven asset during geopolitical instability, gold recently hit a record above $5,000 per ounce in January. However, since the escalation of the Iran conflict, prices have dropped by about 13% to approximately $4,460, raising questions about its reliability as a financial refuge.
Concerns about the broader economic impact remain high. Larry Fink, head of BlackRock, warned that a prolonged conflict could push oil prices as high as $150 per barrel, potentially triggering a global recession.
Fink outlined two possible outcomes: a peaceful resolution that stabilizes oil prices and reintegrates Iran into the global economy, or an extended period of elevated oil prices above $100—possibly nearing $150—that could lead to a severe economic downturn worldwide.
