Oil prices surged following a primetime address by US President Donald Trump on the Iran conflict, according to the BBC — Benchmark Brent crude rose 4.8% to $106.02 a barrel after Trump’s speech, while West Texas Intermediate climbed 4% to around $104. The move came as Trump urged countries to take the lead in keeping the Strait of Hormuz shipping route open, arguing the US does not need energy from the region.

Strait of Hormuz Remains a Key Concern

The Strait of Hormuz is important to the global economy, with around 20% of the world’s energy passing through the narrow shipping lane. However, the waterway has been effectively closed since the conflict began, as Iran retaliated against US and Israeli strikes by threatening to attack ships using the route. Trump’s speech did not provide a concrete timeline for the reopening of the strait, according to Alberto Bellorin from InterCapital Energy.

Bellorin noted that the gains in oil prices represent a ‘clear market reality check’ following earlier optimism about an imminent ceasefire. He added that a return to normal conditions now looks ‘months away rather than weeks.’ Trump’s remarks have removed hopes that disruptions to global energy supplies will be resolved swiftly, according to Bellorin.

Market Reactions Across Asia and the US

Major stock indexes in Asia fell after Trump’s address, reversing earlier gains; the Nikkei 225 in Japan dropped 1.9%, South Korea’s Kospi fell by 3.5%, and the Hang Seng in Hong Kong was 1% lower. Asia’s stock markets have been volatile since the Iran conflict began at the end of February, with the region particularly vulnerable to the impact of the conflict due to its heavy reliance on Middle East energy supplies.

US stock futures also declined. Pointing to a lower open for Wall Street on Thursday — Dow Jones and S&P 500 futures were around 1% lower, while Nasdaq futures were down by about 1.4%. Stock market futures are contracts that allow investors to buy or sell a stock index at a set price on a future date, functioning as a bet on market direction.

Trump’s Optimism Drives Market Rally

Trump’s earlier comments about the Iran war ending in ‘two to three weeks’ had triggered a rally in global stock markets. Brent crude fell as low as $98.35 a barrel on Wednesday, down more than 15% on the previous day and its lowest level in a week. However, it later recovered to close at $102.

In Asia. Japan’s Nikkei surged up 5%. While the South Korean Kospi jumped by 8%; Hong Kong’s Hang Seng rose by 2%, and China’s CSI 300 index was up by 1.7%. European stock markets followed Asia higher, with the UK’s FTSE 100 closing 1.8% higher, marking its biggest one-day gain in almost a year — the Europe Stoxx 600 index rose by 2.4%.

Trump had said on Tuesday: “Now we’re finishing the job. I think in two weeks or maybe a few days longer, we’ll do the job. We want to knock out everything they’ve got.” The comments triggered a relief rally in the US stock markets, with the S&P 500 rising by 2.9% at the start of trading and closing 0.72% higher.

Emma Wall, the chief investment strategist at Hargreaves Lansdown, said that markets were ‘choosing to believe the optimism from the White House.’ She added that while Trump’s comments suggest an imminent US victory and withdrawal from the region, energy disruption would continue for some months, likely impacting inflation and economic growth.

City traders began to reduce their bets on UK interest rate rises this year. Money markets priced in about 41 basis points of increases to the UK bank rate by the end of 2026, suggesting investors are no longer expecting two quarter-point rises. On Tuesday, the market had anticipated 66 basis points of rate rises by Christmas, implying two rate increases.

The price of gold, which had jumped by 3.5% on Tuesday, rose another 2.5% on Wednesday to its highest level in almost two weeks, reaching more than $4,786 an ounce. The fluctuation in oil prices and geopolitical tensions continue to drive volatility in global markets, with investors closely watching Trump’s next moves in the Iran conflict.