Fears that the ceasefire could fall apart while crude remains stuck in Hormuz saw West Texas Intermediate oil jump at least 3 per cent on Thursday, having plunged more than 16 per cent the day before. Brent rose more than 2 per cent following a 13 per cent drop.
Equities also gave up some of their gains.
Tokyo, Hong Kong, Shanghai, Singapore, Seoul and Mumbai were all down, though there were gains for Sydney, Taipei, Bangkok and Wellington.
London edged up, while Paris and Frankfurt fell, with US futures in negative territory.
Attention is also turning to crunch talks in Pakistan that are expected on Friday or Saturday, with Vance leading the US delegation.
“Many questions remain with the 10-point plan that Trump has received from Iran (which includes Iranian control of the Strait of Hormuz, US acceptance of Iran’s uranium enrichment programme, the end of all sanctions and withdrawal of the US military from the Gulf region) at odds with Trump’s 15-point peace plan,” wrote National Australia Bank’s Skye Masters.
Still, observers warned that an end to the conflict would not see a quick return to normal.
“It should also be noted that there has been significant damage to infrastructure in some major energy exporters,” said Anthony Kettle at RBC BlueBay Asset Management.
“Even if the ceasefire holds it will take time for energy exports from the region to return to more normalised levels, so there will be an impact on growth and inflation that is still difficult to ascertain.”
Still, Forex analyst Fawad Razaqzada said: “Investors are confident that oil prices could ease further and the Strait of Hormuz will reopen again and hopefully stay open beyond the two-week ceasefire period.”
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