Global markets traded cautiously on Tuesday as oil prices slipped after US President Donald Trump delayed a planned military strike on Iran, easing immediate fears of a wider conflict in the Middle East. Brent crude and US West Texas Intermediate both fell by about two per cent following Trump’s decision to pursue diplomacy instead of immediate military action.
Investors, however, remained uneasy as tensions surrounding the Strait of Hormuz continued to cast a shadow over global trade and energy supplies. The vital shipping route, through which a significant share of the world’s oil passes, has remained at the centre of the ongoing crisis between Iran, the United States and Israel.
Asian stock markets posted mixed performances, reflecting uncertainty among investors despite the temporary easing in oil prices. South Korea’s Kospi index dropped sharply, while Chinese equities also recorded losses as traders weighed the risks of further escalation in the region. European futures steadied slightly, but analysts said markets remained highly sensitive to developments from the Gulf.
Oil had surged above $110 per barrel earlier amid fears that military escalation could further disrupt supplies and deepen the blockade around the Strait of Hormuz. Although Trump’s decision to delay the strike provided short-term relief, crude prices remain significantly higher than levels recorded before the conflict intensified.
The White House said Gulf allies including Qatar, Saudi Arabia and the United Arab Emirates urged Washington to allow more time for negotiations with Tehran. Trump confirmed that he had paused the operation for several days to create space for diplomatic engagement, while warning that military action could still proceed if talks fail.
Analysts warned that despite the decline in oil prices, markets remain fragile because traders are uncertain whether diplomacy will succeed. Concerns persist over inflation, supply shortages and the broader impact of the conflict on the global economy. Rising energy costs have already unsettled bond markets and added pressure on central banks facing inflation challenges.
Market observers said investors are now closely watching developments in the Gulf, particularly negotiations involving Iran and efforts to guarantee safe passage through the Strait of Hormuz. Any renewed military confrontation or disruption to shipping routes could trigger another sharp rise in oil prices and fresh turbulence across global financial markets.
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