Oil Shoots Over $110 as Trump's Iran Deadline Looms
April 7, 2026
Global stocks wavered on Tuesday, while oil prices were perched above $110 per barrel as the prospect of escalation in the war in the Middle East and the looming deadline for a deal to be reached kept nervy investors on the sidelines.
Markets have been rattled since the U.S.-Israel war on Iran broke out at the end of February, with Tehran effectively closing the Strait of Hormuz, a key global oil transit chokepoint that has spurred inflation worries.
While investors have pinned their hopes on a resolution to the war, the talks so far have yielded no progress, with U.S. President Donald Trump imposing a deadline of Tuesday 8 p.m. Eastern Time (0000 GMT Wednesday) for a deal to be reached.
That has triggered a risk-off and cautious mood with the U.S. dollar holding onto its gains and oil prices surging. O/R
Brent crude futures LCOc1 rose 1% to $111.53 a barrel having risen over 50% since the war started.
A record-breaking quarterly profit forecast from chipmaker Samsung Electronics 005930.KS helped lift investor mood a bit in Asian hours before the reality of the energy shock from the six-week long war set in.
Japan's Nikkei was choppy as it erased early gains to trade flat. South Korean stocks .KS11 were up 0.2% having surged over 2.5% earlier in the session.
U.S. stock futures EScv1fell 0.35%, while European futures STXEc1 pointed to a slightly higher open after being closed for holidays on Friday and Monday.
"We are back on a Trump imposed countdown clock and there's no way to predict with any confidence what will happen," said Kyle Rodda, senior markets analyst at Capital.com.
"The more intrepid traders might make a bet one way or the other. Others will look to hedge risk or stay out entirely. But there's not much market participants can really do but wait and see."
Iran said it wanted a lasting end to the war, instead of a temporary ceasefire and pushed back against pressure to reopen the waterway, a conduit for about a fifth of the world's oil and natural gas supply.
Trump warned Iran could be "taken out" if it did not meet his deadline for a deal, vowing to destroy Iranian power plants and bridges, brushing off concerns that such actions would be a war crime.
"Any follow‑through on threats to target Iran’s power infrastructure would mark a significant escalation, raising the risk of retaliatory action that could further disrupt Gulf energy facilities," said Vasu Menon, managing director of investment strategy at OCBC in Singapore.
Stagflation Risks
The conflict has spurred worries about stagflation - high inflation with weak or slow growth - upending the global rates outlook, with traders no longer pricing in any rate cuts from the Federal Reserve this year.
Data on Monday showed U.S. services sector growth slowed in March, while prices paid by businesses for inputs increased by the most in more than 13 years, an early indication that the prolonged war with Iran was boosting inflationary pressure.
U.S. inflation data is due on Friday that will likely underscore the extent of the pricing pressure from rising energy prices but for now investor attention will be on Trump's war deadline and whether a deal is agreed.
In currencies, the euro EUR= was steady at $1.1538. The dollar index =USD, which measures the U.S. currency against six other units, was at 100.03, near its recent highs. The dollar has been the haven of choice among investors during the tumult. FRX/
The Japanese yen JPY= last bought 159.74 per U.S. dollar, hovering near the crucial 160 level that traders have been watching out for to gauge whether Tokyo might intervene in the wake of strong recent comments from officials.
Gold prices XAU= eased 0.17% to $4,640 per ounce in early trading.
(Reuters - Reporting by Ankur Banerjee in Singapore; Editing by Sonali Paul and Raju Gopalakrishnan)
