Washington: Oil prices fell, and markets rallied after President Donald Trump postponed strikes on Iran, a development closely watched in India for its economic impact.
Trump, in a Truth Social post, said the United States would hold off on attacks on Iranian energy infrastructure for five days after what he described as “very good and productive conversations” with Tehran on ending the conflict.
He said the pause would remain “SUBJECT TO THE SUCCESS OF THE ONGOING MEETINGS AND DISCUSSIONS,” signalling a possible diplomatic opening in the three-week-old war.
The announcement marked the first acknowledgement of high-level talks since the United States and Israel began strikes on Iran in late February, targeting military and leadership positions, The Washington Post reported.
Markets reacted quickly. According to The Wall Street Journal, U.S. stock futures rose nearly 2 per cent, reversing earlier losses. Brent crude, the global oil benchmark, dropped sharply to below $100 a barrel after trading above $114 during the conflict, The Washington Post said.
European markets also turned positive after early losses, while cryptocurrencies gained as investor sentiment improved, according to The Wall Street Journal.
Analysts said the move could help restore energy flows through the Strait of Hormuz, a key route for global oil shipments.
“If talks have been so positive, then you would hope that a path to an opening of the Strait has become clearer,” said Hamad Hussain of Capital Economics, as quoted by The Wall Street Journal.
Still, uncertainty remains. Iranian state-linked media described Trump’s announcement as a retreat, while other reports suggested there had been no direct or mediated talks before the statement, according to The Washington Post.
The conflict has already hit global energy infrastructure. Iranian missile strikes damaged major facilities, including a gas-to-liquids plant in Qatar, forcing part of the operation offline for at least a year, The Wall Street Journal reported.
Higher fuel costs are beginning to affect economies. Diesel prices in the United States have risen more than 40 per cent in a month, raising concerns about supply chains and consumer prices, The Wall Street Journal said.
Despite Monday’s rally, investors remain cautious. The conflict has driven volatility in bond markets and heightened expectations of interest rate hikes amid rising inflation risks, according to The Wall Street Journal and The New York Times.
For India, the drop in oil prices offers immediate relief. As one of the world’s largest crude importers, India is highly sensitive to price swings. Lower oil prices can ease inflation and reduce pressure on the government’s finances.
At the same time, the situation in the Gulf remains a concern. Millions of Indians live and work in the region, and any escalation could disrupt livelihoods and remittance flows that are vital to the Indian economy.
(IANS)
