Markets recovered some losses after steep declines triggered by the International Energy Agency chief’s warning that additional stockpiles could be released if required
News Desk
NEW YORK: Oil prices resumed their push higher Tuesday as several countries pushed back against Donald Trump’s demand that they help secure the key Strait of Hormuz, while Iran continued to target crude-producing neighbors.
The advances pared some of the previous day’s sharp losses that came after the head of the International Energy Agency (IEA) said more stockpiles could be tapped if needed. Still, equities extended Monday’s gains as tech firms rallied after Nvidia said it expected to make at least $1 trillion in revenue through the end of 2027.
Investors are also awaiting a slew of central bank decisions this week that analysts say could see a resumption of interest rate hikes aimed at offsetting a possible spike in inflation caused by the surge in crude prices.
Trump has called for allies in Europe and elsewhere to help reopen the Strait of Hormuz, which Iran has effectively closed, saying at the weekend that securing the waterway “should have always been a team effort, and now it will be”.
But on Monday there was only a lukewarm response, with German Chancellor Friedrich Merz saying the war started by US-Israeli strikes on Iran was “not a matter for NATO”, while Britain, Spain, Poland, Greece and Sweden all distanced themselves from the calls.
The US president told The Financial Times on Sunday that it would be “very bad for the future of NATO” if the allies refused to help, and said Monday that he had asked to delay a summit with Chinese leader Xi Jinping by a “month or so” over the issue.
With the crisis showing no sign of ending soon, both main crude contracts rose more than two percent to sit around $100. They had dropped Monday after IEA boss Fatih Birol flagged that member countries could unlock more oil from strategic stocks “if needed”, after already agreeing last week to a record release of 400 million barrels.
However, Pepperstone’s Chris Weston said: “Conviction behind a sustained rally in risk assets remains relatively low, although it is important to stay open-minded to the possibility that momentum could build.”
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