Oil prices plunged on Tuesday afternoon on signals that Iranian leadership may be open to negotiations to end the war — the first such move from the regime since the start of the conflict.
In comments first reported by state media, Iranian President Masoud Pezeshkian told EU Council president António Costa that Iran has “the necessary will to end this war” but expects certain guarantees in exchange.
Pezeshkian also said on Monday that any end to the war in the Middle East must “guarantee the security and interests of the Iranian people,” according to comments first published by the state news agency IRNA and reported by regional media.
Futures on Brent crude (BZ=F), the international benchmark, fell by more than 2.9% to trade at $104 per barrel, while those on US benchmark West Texas Intermediate crude (CL=F) shed as much as 2% before paring some losses to trade at $101 per barrel.
Read more: What an extended war with Iran could mean for gas prices
US stocks turned sharply north. The S&P 500 (^GSPC) gained roughly 2.4%, while the Dow Jones Industrial Average (^DJI) picked up 2% on the session, or more than 900 points. The tech-exposed Nasdaq Composite (^IXIC) saw the strongest gain, returning 3.2% as of Tuesday afternoon.
Oil prices and US equities have spent the past two weeks swinging from gains to losses on a series of comments from President Trump, White House officials, and Iranian leaders that have signaled both paths to peace and potential escalation.
According to Al Jazeera, Iran’s foreign minister, Abbas Araghchi, said, “What is happening now is not negotiations but an exchange of messages directly or through our friends in the region.”
In previous demands shared publicly, Iran has called for sovereignty over the Strait of Hormuz, where the regime has begun charging expensive tolls for safe passage of ships, and reparations payments alongside other conditions for ending the war.
US Secretary of State Marco Rubio called the tolls “unacceptable” and “dangerous to the world” in comments after a G7 meeting in France, according to CNN.
In Washington, Trump has repeatedly threatened to reopen the strait by force. But on Tuesday morning, the president seemed prepared to wind down aggressive military action, posting on Truth Social, “Iran has been, essentially, decimated. The hard part is done.”
Trump also told the New York Post on Tuesday morning that the war “won’t last much longer” and the strait will open “automatically” after a US withdrawal. Previous Truth Social posts from the president put a timeline on Iran to negotiate or face further damage to critical infrastructure.
