Saudi Pipeline Tests and Iran Talks Drive Crude Below $98

Global equity markets opened mixed on Tuesday as a rally in AI-linked stocks stalled and oil prices reversed sharply lower. The moves followed reports that Saudi Arabia had conducted tests on its East-West oil pipeline and that Iran may be willing to reopen the Strait of Hormuz if the United States lifts its blockade on Iranian ships.

On Monday, the Nasdaq closed at a new record high, boosted by Meta’s launch of its consumer-focused AI product, Muse. Chip makers AMD and Intel gained 10% and 14% respectively in that session on expectations of broadening demand for the semiconductors and data centers that power AI systems. Both stocks lost more than 1% in premarket trading on Tuesday.

In Asian trade, Korean chip giant Samsung Electronics rose 0.9%, while peer SK Hynix lost 1.5%. Dutch semiconductor equipment maker ASML edged up just 0.2% in European trade.

In the United States, Nasdaq futures were flat. Futures for the Dow Jones Industrial Average reversed earlier losses to rise 0.3%, while the S&P 500 edged up 0.05% to trade near 7,764.70. Europe’s Stoxx 600 gained 0.6% as lower oil prices boosted energy-sensitive sectors.

Oil prices swung dramatically during the European morning. Brent crude contracts, which had risen nearly 2% to trade near $102 a barrel, fell more than 1% to trade near $98. West Texas Intermediate contracts also reversed course, falling more than 1% to below $93.50 a barrel.

The catalyst for the oil reversal came from Saudi Arabia, which ran tests on its critical East-West pipeline. The pipeline is a major export route that bypasses the Strait of Hormuz, and the tests suggest the kingdom is close to reopening it.

Investor sentiment was further lifted by a report from Japan’s Kyodo News Agency that Iran is willing to reopen the Strait of Hormuz provided the United States ceases its blockade on Iranian ships. American and Iranian diplomats are gathered in New York for the United Nations General Assembly, where President Trump is scheduled to deliver an address later Tuesday.

In fixed income, Treasury yields continued to move in tandem with oil prices. The 10-year Treasury yield fell 2.6 basis points to 4.930%, while the 30-year yield fell 1.8 basis points to 5.268%. Eurozone government bond yields also slipped.

The dollar continued to strengthen against the yen, trading above 157 yen. Traders responded to the Bank of Japan’s rate hike last week, which turned out less hawkish than expected, while expectations for further Federal Reserve rate hikes supported the greenback.

Bitcoin pulled back from its session highs but held at around $85,900. New York gold contracts continued to tread water, falling slightly to around $4,360 a troy ounce. Japanese markets remained closed for holidays until Thursday.

Eurozone investors are also watching political developments in Germany, where Chancellor Friedrich Merz faces increased pressure on his leadership.