Global economic update: oil prices fall, stock markets reassured amid Middle East conflict

Paris, France – The latest global economic developments on Wednesday at approximately 8am GMT, as the war in the Middle East enters its 26th day.

Oil prices fall

Oil prices fell on Wednesday, with Brent dropping below 100 dollars, following Iran's announcement that it would unblock the Strait of Hormuz for ships deemed “non-hostile” and the transmission of a US peace plan to Tehran.

At around 7:40am GMT, North Sea Brent crude, the global oil benchmark, fell by 4.95 percent to 99.27 dollars a barrel. The US benchmark, West Texas Intermediate (WTI), dropped 4.13 percent to 88.54 dollars.

The US president expressed optimism on Tuesday about the chances of reaching an agreement with Iran. “We are in negotiations” and Iran has offered the US “a very big gift” related to hydrocarbons, “the equivalent of a lot of money,” the US president stated, without providing further details.

Several media outlets, including The New York Times and Israeli television channel Channel 12, report that the Trump administration has sent a 15-point peace plan to Iran via Pakistan, which is on good terms with both parties. One of the points demands that the Strait of Hormuz remain open to maritime navigation.

European and Asian stock markets reassured

European and Asian stock markets are reassured. At the opening, Paris gained 1.20 percent, Frankfurt 1.43 percent and London 0.63 percent. Tokyo's Nikkei index closed up 2.9 percent at 53,749.62 points, and the Shanghai Composite Index rose 1.3 percent to 3,931.84 points. Hong Kong's Hang Seng continued to trade in the green (+0.5 percent at 25,199.45 points) around 7:30am GMT, along with Sydney, Singapore, Mumbai, Bangkok, Jakarta, Wellington and Taipei.

In the currency market, the greenback is down against the Japanese currency, with one dollar trading for 159.00 yen. Gold, on the other hand, rebounded by 2.79 percent, to 4,562.59 dollars an ounce (31.1 g).

Oil: IEA ready for new stock release after Japan's request

The director of the International Energy Agency (IEA) said on Wednesday he was “ready” to implement a new release of oil stocks “if and when necessary,” on the 26th day of the war in the Middle East, which is causing hydrocarbon prices to soar.

These statements by Fatih Birol were made in response to a request from Japanese prime minister Sanae Takaichi to “prepare to implement” such a coordinated operation during their meeting in Tokyo.

Iran has stated that “non-hostile ships” can use the Strait of Hormuz, provided they respect safety and security rules, according to a statement sent to the International Maritime Organization (IMO).

The statement read: “Non-hostile ships... may benefit from safe passage through the Strait of Hormuz in coordination with the competent authorities, provided they do not participate in or support acts of aggression against Iran and fully comply with current safety and security regulations.”

French minister of the economy Roland Lescure affirmed on Tuesday at the National Assembly that the war in the Middle East is causing “a new oil shock” that risks weighing on France's economic growth.

“It's an oil shock. We've had about ten in the last 50 years,” said Lescure. “The hypothesis of a temporary crisis, whose economic consequences would disappear with the end of the bombing, is unfortunately no longer relevant,” he estimated, before the Finance Committee.

The French economy has been “hit by global turmoil,” according to the National Institute of Statistics and Economic Studies (Insee). On Tuesday, the institute indicated that French growth is expected to be lower than forecast in the first and second quarters due to inflation linked to rising hydrocarbon prices, although it will “resist” at this stage.

After 0.5 percent growth in the third quarter of 2025 and a slowdown to 0.2 percent in the fourth quarter, Insee again forecasts a 0.2 percent increase in gross domestic product (GDP) for the first and second quarters of 2026, it said in its economic outlook.

This article was translated to English using an AI tool.

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