𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

The cost of crude oil eased back and financial markets rallied higher on the latest hopes of a resolution to the Iran conflict.

Brent crude fell back below 100 US dollars a barrel, down 2% at 99.89 dollars in morning trading on Wednesday, with US President Donald Trump suggesting the war could be over within two weeks, despite bringing thousands of troops to the region.

UK natural gas prices were also 4% lower.

Stock markets in the UK and globally rebounded on optimism over a ceasefire, with the FTSE 100 Index soaring as much as 1.7%, up 175.76 points to 10352.21 in the first hour, and even bigger gains across Europe as the Dax in Germany and France’s Cac 40 jumped more than 2%.

Markets in Asia also surged higher overnight after the positive signals over the war, with Iran acknowledging for the first time that Washington had been in direct contact about a possible ceasefire and its president saying he was open to ending the war, subject to certain guarantees.

But it came as Iran hit a tanker off the coast of Qatar and Kuwait International Airport as its attacks continued on neighbouring countries in the Gulf.

Richard Hunter, head of markets at interactive investor, said: “A coiled spring was unleashed as investors saw clear light at the end of the tunnel for an end to the hostilities in the Middle East.

“With a mountain of cash reportedly on the sidelines, investors had been waiting for a trigger to put the money to work.”

But he said the “damage is far from repaired” on stock markets after recent punishing falls.

Mr Trump has faced growing pressure to end the war as Iran’s stranglehold on shipping through the Strait of Hormuz and its attacks on regional energy infrastructure have sent oil and gas prices to their highest level since 2022.

A fifth of the world’s oil is shipped through the strait and its blockage by Iran has seen crude prices rise by around 50% since the US-Israel war on Iran started on February 28.

Susannah Streeter, chief investment strategist at the Wealth Club, said: “Even if the war ends in weeks, the damage wreaked to energy facilities in the region will take years to repair.

“Iran is also now flexing more control over the Strait of Hormuz, planning tolls on ships, so freight costs will rise even as it reopens.

“So, despite today’s relief wave on markets, deep problems remain and ministers are trying to work out how to offer a salve to consumer businesses.”