Oil collapses, stocks in Asia jump after Trump's promise to end the war soon

Oil prices fell below $90 per barrel after jumping to almost $120 during the previous trading session. At the same time, stock indices of Japan and South Korea rose sharply. This is how commodity and stock markets reacted to US President Donald Trump's promises to end the war in Iran "very soon" and partially suspend oil sanctions.

Futures for benchmark Brent crude oil fell by 11% to $88.1 per barrel at the beginning of trading on March 10. Contracts for delivery of North American oil WTI collapsed by 10.9% - to $84.4. Subsequently, prices corrected upward - to $94 for Brent and to $90 for WTI. The current drawdown of quotations of both grades is about 7%.

Meanwhile, Asian stock indices moved to a rapid rise. The broadest index of Asia-Pacific stocks excluding Japan (MSCI International All Country Asia Pacific ex Japan) added more than 3% during trading, recovering some of the losses incurred during the Iran war.

Japan's Nikkei 225 index jumped 3.7% shortly after the opening of trading in Tokyo, while South Korea's Kospi soared 6.6%. Such a rapid growth forced the Korean Exchange to activate a mechanism to limit volatility: after futures prices rose by more than 5%, program trading was blocked for five minutes.

At the same time, the dynamics of futures on American shares was restrained. March contracts on the S&P 500 index fell by 0.2%, reducing yesterday's rebound.

On March 9, oil prices soared after major Middle Eastern producers began cutting production amid disruptions in transit through the Strait of Hormuz. In addition, contrary to Trump's intention to personally participate in the selection of a new head of Iran, the Islamic authorities announced his son Mojtaba as the successor to the assassinated supreme leader Ali Khamenei.

On the night of March 10, Trump made it clear that the war with Iran was nearing completion and that the Pentagon's campaign in the Middle East was well ahead of schedule. He also announced his intention to ease oil-related sanctions in order to curb oil prices. The statements of the G7 finance ministers that the group would be ready to release oil from strategic reserves if necessary also contributed to the decline in oil quotations, Trading Economics stated.

"While all of this has helped to somewhat dampen short-term panic, it's hard to accept the idea that the [Iranian] conflict is effectively over," said IG analyst Tony Sycamore. "Nevertheless, the softening of President Trump's rhetoric - from demanding full surrender to declaring the mission 'very complete' - is a positive development that should help ease tensions at least in today's trading in Asia," he added.

Arun Sai, an investment strategist at Pictet Asset Management, viewed Trump's statements on the Iran conflict as another retreat from his initial positions, familiar to markets from his decisions on trade policy, the Financial Times reports. The expert characterized the US president's behavior with the popular joking term TACO (Trump Always Chickens Out) among investors. "The claim that there is no path to retreat is absurd," he added.

This article was AI-translated and verified by a human editor