Crude prices plummet, equities largely gain as Trump predicts swift end to Iran conflict

Oil prices experienced a sharp decline on Tuesday, plummeting as President Donald Trump suggested that the US-Israeli conflict with Iran may be nearing its end sooner than anticipated, sparking a volatile session in the markets.

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As a result, the international oil benchmark, Brent North Sea crude, suffered an 11.3 percent drop to $87.80 per barrel, a significant decrease from the previous day's price, which had approached $120.

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The decline in oil prices gained momentum as member states of the International Energy Agency convened for emergency talks to assess the current security of supply and consider the potential release of emergency stocks.

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Following a meeting in Paris with G7 energy ministers, IEA executive director Fatih Birol stated that he was in close communication with energy ministers from key producing and consuming nations regarding the situation.

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The Paris and London stock markets saw gains of over 1.5 percent, driven in part by a 15 percent decrease in European gas prices, which helped alleviate concerns about a potential resurgence of global inflation.

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Frankfurt's market ended the day with a 2.4 percent increase, while Asian stock markets also rallied, with Seoul experiencing a gain of more than five percent and Tokyo closing with a 2.9 percent increase.

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According to analyst Axel Rudolph at IG trading platform, the recovery of global stock indices was largely driven by renewed optimism stemming from falling oil prices, with the strongest gains seen in Asia and Europe.

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Meanwhile, Wall Street stocks spent much of the session in positive territory but ultimately lost ground after Energy Secretary Chris Wright deleted a social media post claiming that the US Navy had escorted an oil tanker through the Strait of Hormuz, a claim that was later denied by White House spokeswoman Karoline Leavitt.

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The broad-based S&P 500 finished the day down 0.2 percent, with Jack Ablin of Cresset Capital Management noting that oil remains a top concern for investors, as it is "the lifeblood of the global economy" and any potential disruption is a cause for concern worldwide.

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Investors were also digesting President Trump's remarks on Monday, in which he stated that the campaign was ahead of schedule and would be ended soon, warning Iran that if hostilities were to resume, they would face even harsher consequences.

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Iran has responded by vowing to block Gulf oil exports and asserting that it, not the US, would determine the end of the war, prompting President Trump to warn against mining the Strait of Hormuz, through which nearly 20 percent of the world's crude oil is transported.

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President Trump also issued a stern warning to Iran via social media, stating that if mines were placed in the Strait of Hormuz and not removed promptly, the country would face military consequences "at a level never seen before".

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At around 2115 GMT, key market figures showed significant changes, with Brent North Sea Crude down 11.3 percent at $87.80 per barrel and West Texas Intermediate down 11.9 percent at $83.45 per barrel.

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The New York stock market saw the Dow close down 0.1 percent at 47,706.51, while the S&P 500 finished down 0.2 percent at 6,781.48, and the Nasdaq Composite ended the day flat at 22,697.10.

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European markets saw gains, with the London FTSE 100 up 1.6 percent at 10,412.24, the Paris CAC 40 up 1.8 percent at 8,057.36, and the Frankfurt DAX up 2.4 percent at 23,968.63.

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Asian markets also experienced significant gains, with the Seoul Kospi up 5.4 percent at 5,532.59, the Tokyo Nikkei 225 up 2.9 percent at 54,248.39, and the Hong Kong Hang Seng Index up 2.2 percent at 25,959.90.

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The Shanghai Composite saw a more modest gain of 0.7 percent, closing at 4,123.14, while currency exchange rates showed the euro/dollar down at $1.1611, the pound/dollar down at $1.3416, and the dollar/yen up at 158.12 yen.