Oil has retreated to below $100 a barrel while stocks rise as Iran suggested it was open to striking a deal with the US, despite the collapse in talks over the weekend.
Even as the US began its blockade of the Strait of Hormuz, a wave of relief spread across markets as Donald Trump said Iranian negotiators were keen to strike a deal.
Iranian President Masoud Pezeshkian said the country was open to talks but only within the framework of ‘international law’.
Brent crude dipped below $100 per barrel to around $98, with Asian stocks up overnight and the S&P 500 closing above its pre-war level.
But the US is still playing hardball, going ahead with its blockade of the Strait of Hormuz, which came into effect on Monday afternoon (London time). Trump said the US would block Iranian vessels and any ships that paid tolls.
Vice President JD Vance said the US had shown ‘two can play at that game… If the Iranians are going to try to engage in economic terrorism… no Iranian ships are getting out, either.’
Elsewhere today, Rachel Reeves will visit Washington DC for an International Monetary Fund (IMF) summit. Growth forecasts for the UK are expected to be slashed as higher energy prices take their toll, raising the risk of stagflation and recession.
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