After Donald Trump promised more heavy strikes on Iran and failed to give a solution to reopen the vital Strait of Hormuz, oil prices surged and markets plummeted on Thursday. Investors were unconvinced by the president’s call, in his national address, for other countries that rely on the canal for electricity to reopen it.
Patrick Munnelly, a market strategist at Tickmill Group, stated that Trump’s remarks threw the financial markets into further turmoil. “Trump promised that the canal would reopen “naturally” when tensions subsided, but he gave no specifics or a date.” After recent sessions saw signs of de-escalation, investors were hoping for more of the same. However, Trump’s televised statement late Wednesday killed those dreams.
After falling below $100/bbl before Trump’s speech, the international oil benchmark Brent North Sea crude rose about 8% to over $109/bbl.
At the opening bell, all three of the main New York equity indices were down over 1%.
Midway through the European trading day, the Frankfurt stock market lost over 2%. Despite a 1% decline in Paris, oil behemoth TotalEnergies rose 3% on news that it earned $1 billion trading petroleum products in March.
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