Oil price falls as Trump talks up Iran peace negotiations

 

Oil price falls as Trump talks up Iran peace negotiations (Image: Getty Images)

Oil prices have fallen after US President Donald Trump said negotiations to end the war were progressing, while Iran said "non-hostile" vessels could pass through the Strait of Hormuz.

 Brent crude fell by 5% to just under $100 (£74.62) a barrel on Wednesday.

READ MORE: Why the Strait of Hormuz matters so much in the Iran war

 Trump said on Tuesday that talks to end the war were happening "now" and that the people the US were in discussions with "want to make a deal so badly" - a claim disputed by Iranian officials.

 A spokesman for the Iranian Foreign Ministry stated on Tuesday that "no one can trust US diplomacy" in response to claims of such talks. "Can anyone believe their claims of diplomacy or mediation are credible when they started this war and continue attacking us?" Esmail Baghaei, the spokesperson, stated in an interview with India Today. As strikes between Israel and Iran continued to be exchanged, officials in Tehran declared on Monday that claims of talks between the US and Iran were "fake news." Trump claimed that Secretary of State Marco Rubio and Vice President JD Vance were involved in the talks to end the war. The president added that the US-Israeli strikes on Tehran have led to "regime change", repeating his claim that Iranian leaders have agreed that they will never have a nuclear weapon.

However, Tehran has previously denied being in touch with the United States, describing the claims as an attempt to manipulate markets. According to unnamed sources, the US has given Iran a 15-point plan, as reported by the New York Times, Reuters, and Channel 12 in Israel. According to Channel 12, one of the demands made by the United States is for the Strait of Hormuz to be opened and recognized as a free maritime zone. It also detailed what Iran would receive if it accepted the plan, including the removal of sanctions, according to Channel 12.

 The BBC is working to verify the reports and has not seen the document. In a message posted by its mission to the United Nations (UN), Iran said "non-hostile vessels" will be allowed to pass through the Strait of Hormuz, provided they coordinate with "the competent Iranian authorities".

 The statement came after some countries appeared to have negotiated safe passage for their vessels despite Tehran threatening to target ships that tried to use the channel.

 The Iranian UN mission said on X that ships could have safe passage "provided that they neither participate in nor support acts of aggression against Iran and fully comply with the declared safety and security regulations".

Meanwhile, Iran and Israel continue to exchange missile strikes across the Middle East.

 Major stock exchanges in the Asia Pacific gained in morning trade as investors weighed developments in the Middle East.

 Japan's Nikkei 225 and South Korea's Kospi indexes each rose by more than 2%.  Both countries are heavily reliant on oil that passes through the Strait of Hormuz.

 Australia's ASX 200 index was up by more 1.8%.

 Both the Hang Seng exchange in Hong Kong and the composite exchange in Shanghai saw gains of approximately 1%. After opening, the FTSE 100 in the UK traded up more than 1%, while the Dax in Germany gained around 1.5%. The price of gold, which is often seen as a safe haven asset, rose on Wednesday to around $4,500 an ounce but has dropped more than 15% since the start of the conflict.

 Prices peaked in late January at around $5,600 an ounce and then dropped sharply.  In the days following the US and Israeli strikes against Iran, the price then rose again to more than $5,400, but it has since dropped. The prices of silver and platinum have behaved similarly. Energy prices have soared since the war started, as Iran has effectively blocked the Strait of Hormuz, a narrow waterway which usually sees about 20% of the world's oil and liquefied natural gas pass through each day.

 Oil prices are still significantly higher than they were before the US and Israel attacked Iran on February 28. Governments around the world have announced measures aimed at easing the impact of rising oil prices on their economies, while the heads of some of the world's biggest companies have warned about the potential implications of the war.

 On Tuesday, the head of Shell, a major energy company, said that Europe might run out of oil in the next month. "South Asia was first to get that brunt," said Shell CEO Wael Sawan at an energy industry conference in Houston. That has moved to North East Asia, South East Asia, and, as April approaches, more and more to Europe. Larry Fink, the boss of US financial giant BlackRock, told the BBC that a global recession could be triggered if the price of oil hits $150 a barrel.

Source: BBC