Oil prices fell sharply and global stock markets rose on Wednesday after reports emerged that the United States submitted a peace plan to , while Tehran confirmed it would allow “non-hostile” vessels safe passage through the strategic Strait of Hormuz.
Investors reacted positively to early signs of a potential de-escalation after nearly a month of conflict, although analysts warned that the continued arrival of US troops in the region could keep tensions high.
Both Brent and West Texas Intermediate crude dropped more than six percent, with Brent falling below $100 a barrel. US President expressed optimism about resolving the crisis, noting that Iran had offered “a very big present” concerning the Strait of Hormuz, a vital route for one-fifth of global oil and gas flows.
Unnamed US officials told media outlets that Washington had delivered a 15-point peace proposal via Pakistan. Reports suggested the plan could involve a one-month ceasefire, negotiations over Iran’s enriched uranium, a ban on further enrichment, and guarantees of safe maritime passage, while sanctions on Iran could be eased and civil nuclear development supported.
Tehran communicated through the International Maritime Organization that it would allow safe passage for non-hostile vessels, reinforcing that friendly nations would not be targeted.
The developments boosted equity markets across Asia-Pacific, including Tokyo, Seoul, Shanghai, Hong Kong, Sydney, Singapore, Mumbai, Bangkok, Jakarta, Wellington, and Taipei. International Energy Agency chief Fatih Birol also indicated readiness to release additional oil reserves if required.
Despite the positive market reaction, analysts warned that the presence of around 3,000 US troops from the 82nd Airborne Division and other military preparations suggest the situation remains tense.
The economic consequences of the conflict have already impacted countries worldwide: Vietnam doubled diesel prices, the eurozone saw slowed business activity, France revised growth forecasts downward, the Philippines declared a national energy emergency, Sri Lanka reduced street and billboard lighting, Bangladesh raised jet fuel prices sharply, and Ireland cut excise duties on petrol and diesel.
Key Market Figures (approx. 0700 GMT):
- WTI: $89.46 a barrel, down 3.1%
- Brent: $100.54 a barrel, down 3.8%
- Tokyo Nikkei 225: 53,749.62, up 2.9%
- Hong Kong Hang Seng: 25,199.45, up 0.5%
- Shanghai Composite: 3,931.84, up 1.3%
- Dow Jones: 46,124.06, down 0.2%
- FTSE 100: 9,965.16, up 0.7%
- Euro/USD: $1.1600
- Pound/USD: $1.3395
- Dollar/Yen: 159.00 yen
