Oil prices tumbled and global stock markets climbed on Wednesday following reports that Washington had presented a peace plan to Iran, while Tehran confirmed it would allow “non-hostile” vessels to pass through the strategic Strait of Hormuz.
After nearly four weeks of heightened tensions, investors seized on early indications that hostilities might ease. However, analysts cautioned that the deployment of additional US troops to the Middle East suggested that the risk of escalation remains.
The economic repercussions of the crisis are becoming increasingly evident worldwide, prompting several governments to adopt measures to curb energy consumption.
Both major crude contracts fell by more than six percent, with Brent crude sliding back below $100 per barrel. US President Donald Trump expressed optimism over a possible resolution, stating that officials were actively negotiating. The losses narrowed later in the trading day.
Speaking in the Oval Office, Trump described Iran’s recent actions as “amazing” and said they amounted to “a very big present worth a tremendous amount of money,” referring to developments around the Strait of Hormuz, through which about one-fifth of global oil and gas supplies transit. He added that the situation indicated Washington was “dealing with the right people,” without providing further specifics.
According to reports in the New York Times, US officials transmitted a 15-point peace proposal to Iran via Pakistan. Meanwhile, Israel’s Channel 12 suggested that Trump was advocating for a one-month ceasefire, during which Iran would discuss relinquishing enriched uranium and halting further enrichment. In return, Tehran would receive sanctions relief and support for its civil nuclear energy program, while guaranteeing safe passage through the strait.
Iran issued a message through the International Maritime Organization assuring the safe transit of “non-hostile vessels” through the strait. The country has previously indicated it is not targeting friendly nations.
Equity markets responded positively, with major exchanges in Tokyo, Seoul, Shanghai, Hong Kong, Sydney, Singapore, Mumbai, Bangkok, Jakarta, Wellington, and Taipei posting gains.
Further confidence came from International Energy Agency (IEA) Director Fatih Birol, who indicated readiness to release additional oil reserves if necessary.
Despite these signals, Pepperstone analyst Chris Weston cautioned that “developments on the ground do not fully support a de-escalation narrative.” He highlighted reports that around 3,000 US troops from the 82nd Airborne Division might be deployed to the region, alongside discussions of raising the US enlistment age, suggesting continued military preparedness and pressure on Iran to negotiate.
The economic fallout is increasingly visible. Vietnam raised diesel prices to 39,660 dong ($1.50) per litre, more than doubling costs since the onset of the conflict. Eurozone business activity slowed sharply in March, driven by energy price surges and global supply chain disruptions, while France’s INSEE agency reduced its growth forecasts for the first two quarters of 2026.
Elsewhere, Philippine President Ferdinand Marcos declared a state of “national energy emergency,” Sri Lanka ordered street lighting and billboards switched off, Bangladesh raised jet fuel prices by 79 percent, and Ireland cut excise duties on petrol and diesel to mitigate surging costs at filling stations.
Oil Prices Drop as Peace Signals Emerge Between US and Iran; Global Stocks Rise
