Oil rallies, stocks tumble as Trump says US to hammer Iran further

WASHINGTON

Indian-flagged oil tanker Kashimasan remains docked near an offloading terminal at Butcher Island, off the coast in Mumbai on April 1, 2026.

Oil prices spiked and stocks sank on Thursday after Donald Trump reiterated that U.S. forces would hammer Iran for another two to three weeks but offered no solution to the closure of the Strait of Hormuz that has crippled global markets.

Investors were left unimpressed with the U.S. president's first prime-time address to the nation since the war began, in which he again called on countries that rely on the waterway for energy supplies to reopen it themselves.

Trump's speech added little to what he has said in the past, warning that "over the next two to three weeks, we are going to bring them back to the Stone Ages, where they belong".

He also told the nation that U.S. forces would meet all their battlefield goals "very, very shortly".

The address dented a nascent recovery in world markets fuelled by Trump saying this week that the war would be ending "very soon", while his Iranian counterpart said his country had the "necessary will" to end it.

Brent crude, which had fallen back below $100 a barrel Wednesday, surged almost seven percent to hit $108.15, while West Texas Intermediate jumped more than six percent to as high as $106.75.

Trump "spoke of objectives met, but not of resolution. Of continued strikes, not withdrawal. Of optional escalation, not closure", wrote Stephen Innes at SPI Asset Management.

"The message was not one of panic, but it was unmistakably one of unfinished business. And in markets, unfinished business is oxygen for volatility.

"So oil did what oil always does when the illusion cracks. It surged, not because the war suddenly worsened, but because the market had prematurely priced in the expectation that it would end."

The reaction among equity traders was no better, with Seoul — which soared more than eight percent Wednesday — losing more than four percent.

Tokyo, Hong Kong, Shanghai, Mumbai, Singapore, Taipei, Bangkok, Jakarta and Sydney were also well down with London Paris and Frankfurt.

Pepperstone's Michael Brown wrote investors "wanted to hear a bit more than the president provided" and he "failed to give a definitive timeframe for ending the conflict".

"The last couple of days have again proven that risk assets are acting in a manner akin to a coiled spring, ready to rip higher on even an inkling of good news," he wrote.

But he added that "it remains the case that the war is not yet over, commodity supply continues to tighten, and that the full macroeconomic implications of the conflict will only become clear in the fullness of time".

Markets have endured huge volatility since the U.S.-Israeli war on Iran was launched on February 28, with the president frequently U-turning after making policy statements, particularly with regards to foreign relations and military operations.

His announcements that Washington and Tehran were in peace talks have often been denied by the Islamic republic, which insists the strait will remain closed to the country's "enemies".

Trump's repeated demand that countries that rely on energy through Hormuz "get your own oil" comes as Britain prepares to host a meeting of about 35 nations Thursday to discuss how to reopen the waterway.

The meeting will "assess all viable diplomatic and political measures that we can take to restore freedom of navigation, guarantee the safety of trapped ships and seafarers and resume the movement of vital commodities", UK Prime Minister Keir Starmer said.

The speech came amid growing fears about the economic impact of the crisis, which has seen governments around the world introduce support measures and airlines hike fares or cut routes.

World Bank Managing Director Paschal Donohoe said he was fearful about the global economic impact of the crisis.

"We are extremely concerned regarding the effect that this will have on inflation, on jobs and on food security," he told AFP as the Bank announced a new partnership with the International Monetary Fund and International Energy Agency to coordinate aid responses.

And South Korean President Lee Jae Myung, in proposing a $17.2 billion supplementary budget to tackle the crisis, warned the government "is treating the economy as being on a wartime footing".