Oil futures ended lower in a choppy session Thursday after President Trump said he had called off planned military strikes against Iran, raising hopes for a prompt end to the conflict that has roiled global energy markets for weeks. West Texas Intermediate crude settled down 2.6% at $87.71 a barrel, and Brent crude fell 2.9% to $90.38.
Trump posted on Truth Social that discussions with Iran “have been brought to the highest level of Iranian leadership and approved,” adding that discussions and final points have been approved by all parties involved. He said the U.S. naval blockade will remain in force until a transaction is finalized. Earlier in the session, Trump had threatened stepped-up attacks on Iranian targets and said the U.S. would take control of Kharg Island, Iran’s main oil export hub, “in the not too distant future.”
“The market is performing as if it thinks a deal will get done sooner rather than later,” Mizuho’s Robert Yawger said in a note. “Crude oil has been trading in a downward sloping channel since the middle of May.”
The day’s price action reflected the market’s shifting focus between escalation and diplomacy. At one point during the session, WTI was up 0.6% at $90.60 a barrel after Trump’s earlier threat of stepped-up attacks, before reversing sharply on the news that strikes had been called off. TP ICAP’s Scott Shelton said in a note that the market was “paying attention to the reported increasing flows through the Strait of Hormuz and ignoring the escalation of hostilities again as the net effect of them are meaningless for the new supply-demand regime where demand has been crushed in places like India and China.”
BOK Financial’s Dennis Kissler said the escalated military action by the U.S. “is likely to either tighten supplies further or open the strait quicker,” referring to the Strait of Hormuz. “While global inventories have been drawing down, the market still seems focused on lessening demand and gradual supply being added,” he said.
Separately, analysts at UBS warned that the U.S. faces a tighter gasoline market as demand picks up over the summer with refiners giving priority to jet fuel and diesel production. Data for 2023-2025 show gasoline demand 400,000-500,000 barrels a day higher in the second and third quarters than in the first quarter, they said in a note. “As demand ramps into the summer driving season, we see increasing risk of supply tightness,” the UBS analysts said, adding that it could be challenging to source the additional 500,000 or so barrels a day of gasoline required to meet seasonal demand, “raising the likelihood of localized shortfalls.”
In Asia, Macquarie Equity Research analyst Baiju Joshi said India’s power sector is likely undergoing a dual-track evolution. Coal continues to anchor base-load stability, while renewables drive incremental capacity growth, the analyst said in a research report. These trends are supporting an expected expansion in India’s installed capacity to around 900 gigawatts by fiscal 2032 from about 538 GW currently. Macquarie’s preferred sector pick is NTPC, for which it raised the stock’s target price to 480.00 rupees from 475.00 rupees, with an unchanged outperform rating. Macquarie initiated coverage of JSW Energy with an outperform rating and a target price of 720.00 rupees. It also started coverage of Adani Power and Adani Energy Solutions with neutral ratings and target prices of 230.00 rupees and 1,450.00 rupees, respectively.
In Malaysia, MBSB Research analyst Imran Yassin Yusof said the country’s stock market is likely to be driven by external risks in the second half of the year, including tensions in the Middle East, supply-chain disruptions, inflation pressures and potential U.S. rate increases. He recommended a defensive investment approach emphasizing stable, lower-risk stocks while retaining selective exposure to growth opportunities. Tenaga Nasional, CelcomDigi, CIMB Group and Inari Amertron are among MBSB’s preferred picks.
In Europe, RBC Capital Markets analysts Biraj Borkhataria and Adnan Dhanani wrote that an improved macroeconomic backdrop means BP is less reliant on selling assets to meet divestment targets. The company’s finance chief Kate Thomson said higher prices offer an improved outlook for upstream transactions, the analysts wrote after hosting a roadshow with her. The analysts said they expect BP to meet its $14 billion to $18 billion net debt target by end of 2026, a year earlier than the end-of-2027 target the company set. BP shares rose 0.8% to 545 pence.
In Japan, Nomura analyst Daiki Ban said Mitsubishi Gas Chemical is likely to benefit from artificial-intelligence demand and other tailwinds. Demand for packaging materials related to AI applications has been on the rise, such as chip-scale-package substrates, an area of strength for the Japanese company, the analyst said. Nomura lifted its forecast for Mitsubishi Gas Chemical’s recurring profit for this fiscal year to 82.0 billion yen from 69.5 billion yen and raised the stock’s rating to buy from neutral with a target price of 6,000 yen from 4,200 yen. Shares were 10% higher at 4,912 yen.
In Africa, Uganda’s finance minister Henry Musasizi told parliament that the ongoing conflict in the Middle East has hampered logistical supplies for the country’s crude oil project, but authorities remain optimistic about starting oil production at the 230,000-barrels-a-day project later this year. Crude production at fields along Uganda’s western border with the Democratic Republic of Congo is expected to start in the second half of the year, as France’s TotalEnergies and China’s CNOOC Ltd. continue to advance the project amid global oil supply concerns. Musasizi said the production will accelerate the country’s growth to 10.2%, restoring growth to double-digit territory for the first time since the 1990s.