The Tamesis
Oil prices fell on Friday in thin trading as markets in Hong Kong, China, France and Germany were closed.
The main news came later in the Asian trading day, but was positive. Tehran has put forward new proposals for peace talks with the United States through Pakistan, a week after the United States and Iran were locked in a long-running standoff.
The text of the proposal was submitted to Islamabad late on Thursday, IRNA reported.
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Tokyo and Sydney edged higher at the open, but Mumbai fell on concerns about deteriorating economic conditions.
Brent crude, the international oil benchmark, rebounded slightly to around $111 a barrel on Thursday after fluctuating sharply on concerns about renewed hostilities in the Middle East.
With no sign that the United States and Iran are close to a deal, investors fear a prolonged closure of the Strait of Hormuz, through which a fifth of the world’s oil supplies normally pass.
“If oil prices remain in the $100-per-barrel range for an extended period of time, the broader economic costs will ultimately be harder to ignore,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
“But for now, earnings are the bigger fish and the market is happy to continue to go with the flow,” he added.
Crude oil prices have soared in recent days after plunging in early April on news of a U.S.-Iran ceasefire.
Iran has maintained control of the Strait of Hormuz, cutting off vast supplies of oil, gas and fertilizer to the world economy, while the United States has imposed sanctions. Counter-blockade of Iranian ports.
Brent crude oil prices surged to a four-year high above $126 a barrel on Thursday after news platform Axios said Donald Trump would be briefed on potential new military strikes.
Report adds to concerns following incident US president warns blockade of Iranian ports could last for months.
Cleric says Iran doesn’t want war
Despite the failure to negotiate an end to the war, a ceasefire implemented on April 8 remains in effect. On Friday, the head of the judiciary, Gholamhossein Mohseni Ejei, a veteran and respected cleric, said “the Islamic Republic has never shied away from negotiations.”
But in another sign that reaching a compromise may be difficult, Ejei said in a video shared on the judiciary’s Mizan Online website, “We certainly don’t accept impositions.”
However, he said Tehran did not want to return to war.
“We do not welcome war in any way; we do not want war and we do not want war to continue.”
The lack of fighting has done little to calm markets, with oil prices remaining more than 50% above pre-war levels as traders face a prolonged closure of the Strait of Hormuz.
Hormuz Mission
Trump has repeatedly lashed out at Washington’s international allies for failing to work together to reopen the Strait of Hormuz.
France and Britain have led an international coalition of dozens of countries to help reopen the strait, but only if peace is ensured.
But on Thursday, a U.S. official confirmed to AFP that Washington was forming its own international coalition to restart shipping, known as “Freedom of the Seas.”
This prompted French Foreign Minister Jean-Noel Barrot to insist that the two missions would complement rather than compete with each other.
During a visit to the Gulf, Barot said the U.S. mission was “different in nature from the mission we established… it is complementary.”
war powers debate
Meanwhile, Washington is mired in a legal debate over whether Trump has passed his deadline to ask Congress for approval for war against Iran.
Administration officials, including Defense Secretary Pete Hegseth, insist the ceasefire means a 60-day pause that requires the president to seek authorization of war powers from Congress.
“The hostilities that began on Saturday, February 28, have ended for the purposes of the War Powers Resolution,” a senior government official told AFP on Thursday night.
Trump faces mounting domestic pressure over a war with no clear victory in sight, conflict and November midterm elections that have sent inflation soaring.
On Thursday, U.S. government data showed that economic growth was slower than expected and inflation hit 3.5%.
Meanwhile, in Iran, the economic consequences of the war, on top of years of crippling international sanctions, are beginning to take their toll.
On Thursday, the U.S. military said its blockade had prevented Iran from exporting $6 billion worth of oil, while inflation, which had exceeded 45% before the war, reached 53.7% in recent weeks, according to the National Statistics Center.
“For many people, it has become difficult to pay rent or even buy food, and some people even have nothing,” Mahayar, 28, told AFP reporters outside Iran. He said the company where he worked had laid off 34 employees, accounting for nearly 40% of the total workforce.
Central banks are on hold
The energy shock caused by the war has stoked global concerns about rising inflation, but major central banks kept interest rates on hold as they assessed the outlook.
The European Central Bank and the Bank of England both kept interest rates steady on Thursday but signaled the possibility of future rate hikes.
The Federal Reserve and the Bank of Japan also kept borrowing costs unchanged.
Two major Wall Street indexes, the S&P 500 and the Nasdaq, closed at new highs on Thursday as optimism about corporate earnings and U.S. economic growth remained strong.
“The latest U.S. earnings season was strong despite the impact of the Iran conflict, which helped prevent major losses in global markets,” AJ Bell investment director Russ Mold told AFP.
Alphabet, the parent company of Google, reported on Wednesday that profits from its major divisions exceeded expectations and revenue was solid, sending its shares soaring 10%.
After the close on Thursday, Apple said profit exceeded expectations due to strong iPhone demand.
In currency markets, the yen weakened slightly against the dollar, a day after surging on speculation that Japanese authorities had stepped in to provide support.
Officials have recently issued warnings about market moves that have contributed to the yen’s decline, suggesting they are ready to intervene.
Key figures around GMT 1025
North Sea Brent crude oil: rose 0.7% to $111.20 a barrel.
West Texas Intermediate crude oil: rose 0.3% to $105.39 a barrel.
TOKYO – Nikkei 225: up 0.4% to 59,513.12 (close).
Hong Kong – Hang Seng Index: Closed for holidays.
Shanghai – General: The market is closed on holidays.
USD/JPY: fell to 156.50 yen from 156.60 yen on Thursday.
LONDON – FTSE 100: down 0.6% to 10,313.70.
- AFP With additional input and editing by Jim Pollard
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