Oil Prices Slide, European Stocks Rebound on Trump’s Iran Remarks

By Abah Margaret

Global oil prices plunged on Monday while European stock markets rebounded amid volatile trading, following remarks by Donald Trump on tensions with Iran.

Crude oil futures dropped by more than 14 per cent after Trump announced a halt to planned strikes on Iranian energy infrastructure, citing what he described as “very good” talks with Tehran. The sharp decline contrasted with his earlier hardline stance over the weekend.

However, prices later recovered slightly, trading about nine per cent lower after Iran denied that any negotiations had taken place. Analysts say uncertainty continues to drive market volatility.

“We need to wait for more clarity,” said Giovanni Staunovo, a commodities analyst at UBS, as European gas prices also declined.

Stock markets in Asia and Europe initially opened the week on a negative note but later rebounded following Trump’s comments. The gains were partly trimmed after Iranian media dismissed claims of talks with Washington.

Neil Wilson, an investor strategist at Saxo Bank UK, noted that markets remain difficult to navigate due to shifting geopolitical signals. “The market is relieved for now that we may not be entering a more dangerous phase,” he said.

Earlier, the International Energy Agency had warned of a potential global energy crisis, the worst in decades, amid rising tensions in the Middle East.

Over the weekend, Trump issued an ultimatum to Iran to reopen the Strait of Hormuz — a key route for global oil and gas shipments — or face severe consequences. Iran, however, warned the channel could be fully closed if attacked.

Experts warn that continued disruptions could push oil prices higher in the long term, fueling inflation and possibly forcing central banks to raise interest rates, raising fears of a renewed global cost-of-living crisis. Concerns are also mounting over global food security due to disruptions in fertiliser supply chains.

Meanwhile, currency and commodity markets reacted sharply. The US dollar weakened against major currencies, while gold prices partially recovered after earlier losses. Government bond yields, which had surged, also eased slightly.

In global equities, London’s FTSE 100 rose modestly, while Paris and Frankfurt recorded stronger gains. In contrast, major Asian markets including Tokyo, Hong Kong, and Shanghai closed significantly lower.

Despite Monday’s rebound, analysts caution that markets remain highly sensitive to developments in the Middle East, particularly as tensions involving Israel, Iran, and regional groups persist.