Oil drops as Trump pauses Iran strikes, but stock traders nervous

US President Donald Trump warned last Saturday that he would obliterate the Islamic Republic's energy sites if it did not unblock the crucial waterway within 48 hours, but pushed that back five days, citing positive peace talks, which Tehran denied had taken place. But after days of strikes by both sides and mixed reports of negotiations, including the trading of multi-point demands, he announced Thursday that he would again delay the attacks to April 6 after a request from Tehran. "Talks are ongoing and, despite erroneous statements to the contrary by the Fake News Media and others, they are going very well," Trump posted on his Truth Social platform. "As per the Iranian Government request... I am pausing the period of Energy Plant destruction by 10 Days to Monday, April 6, 2026, at 8pm, Eastern Time," he posted. Trump had earlier denied he was desperate for a deal to end the war, despite the Islamic Republic's cool response to an American peace plan and fears the spike in oil prices would fan inflation. Read: Stocks slide, oil gains with Mideast ceasefire prospects centre stage Trump later told a cabinet meeting Iran had allowed 10 oil tankers passage through the Strait of Hormuz, through which about a fifth of world oil and gas passes, to show it was serious about talks. The Iranian news agency Tasnim said the country's response to Washington's 15-point plan to end the war "was officially sent last night through intermediaries, and Iran is awaiting the other side's response". The report, citing an unnamed official, said officials had called for an end to US-Israeli attacks on Iran and Tehran-backed groups elsewhere in the region. It also called for war reparations and for Iran's "sovereignty" over the Strait of Hormuz to be respected. However, Trump's announcement came as the Wall Street Journal cited Department of Defense officials as saying the Pentagon was considering sending as many as 10,000 extra ground troops to the Middle East. Oil prices fell more than 1% on Friday, though that only partially pared the previous day's surge amid growing anxiety that the conflict will last far longer than first thought. Brent is up almost 50% since the war began on February 28, while West Texas Intermediate has risen around 40%. Equities struggled following hefty losses in Wall Street. Tokyo and Seoul, which had been the standout performers in the first two months of the year, were among the biggest losers, while Hong Kong, Sydney, Wellington, Taipei Jakarta and Manila were also sharply lower. Shanghai and Singapore fluctuated. Investors are also increasingly sceptical about the messaging from the White House, with Trump often flipping between threats and talk of peace. Read More: Oil prices plunge 8% on US-Iran talks to resolve hostilities in the Middle East "A ten-day extension sounds like breathing room, but in market terms, it feels more like a trader rolling a losing position forward, hoping the next candle delivers what the last one refused to give," said SPI Asset Management's Stephen Innes referring to an investors analysis tool. "Time has been purchased, not clarity. And the market knows the difference." National Australia Bank's Ray Attrill said, "Whether peace talks are taking place between the US and Iran remains debatable, Iran insisting that exchanges of letters via a friendly intermediary (presumed to be Pakistan) does not constitute talks." Meanwhile, the World Trade Organisation warned the global trading system was experiencing the "worst disruptions in the past 80 years", while the World Bank said it was prepared to provide immediate financial assistance to emerging market countries. Also Read: What does each side in the Iran war say it would accept for a deal? That came as the Organisation for Economic Cooperation and Development warned US inflation could hit more than 4% this year as a result of the spike in crude prices. That compares with its previous projection of 2.8%. The prospect of another spike in the cost of living led several Federal Reserve officials to express concern about the outlook for the world's top economy and suggested interest rates were unlikely to come down any time soon. With the economic impact worsening, governments around the world are being forced to act. Spain approved a sweeping $5.8 billion package including steep cuts to energy taxes, while Poland's prime minister announced a series of measures to address soaring fuel costs, including reduced taxes and price ceilings. South Korea said it will roll out a $17 billion "wartime" supplementary budget and expand fuel tax cuts.