Oil falls sharply on peace prospects in Iran

BarcelonaThe market is once again confident in an imminent resolution to the war in Iran, and the barrel of oil has noticed. Investors have appreciated that Iranian authorities are studying a peace proposal, as reported this Wednesday morning by the American portal Axios. Furthermore, they have read the withdrawal of Project Freedom by the President of the United States, Donald Trump -an initiative to provide military escort for ships crossing the Strait of Hormuz- as a sign of goodwill towards the Tehran government.

With peace talks more advanced, Brent crude has cut its price by more than 7% this Wednesday, just above $102 for the first time since April 27. West Texas Intermediate has cooled at the same rate, settling at $95. The cut in crude oil prices has also given a boost to stock markets, which have climbed again after the slump last Monday, caused by the banking sector.

The barrel of crude, it must be said, had fallen by nearly 11% during the morning, dropping below the $100 mark for the first time in more than two weeks. The fall moderated, however, after a publication by Trump on his social network, Truth Social, in which he threatened to "begin bombing on a much larger scale than has ever been seen before" on Iran if Tehran did not accept the peace conditions.

The threat, however, was not serious enough to reverse the price drop, and only slowed it down. Iran, for its part, has communicated that it is already reviewing the possible peace agreement proposed by Washington, and has helped to cushion the blow from the White House.

The stock market gains momentum

Good oil news has helped to boost European stock markets during the day. The Íbex-35 (the benchmark index on the Spanish stock market), at the close of the session, rose by nearly 2.5%, recovering the 18,000 points it had lost on Monday due to the banking collapse. The trend has been replicated in the rest of the main markets, with the British FTSE-100 climbing 2.15%. The German Dax 40 revalued by 2.2%, while the French CAC-40 registered the best performance, with a rise of close to 3% at the end of the session.

In the Spanish case, the big winners were companies most intensive in fossil fuel consumption, such as the steelmaker Arcelormittal or the airline group IAG, which gained 8% and 6.5% respectively. Banking also regained ground, driven by more optimistic economic forecasts, with particular gains for the most internationalized firms, BBVA (+3%) and Santander (+3.8%). The trend has been reproduced in the European environment, with significant jumps in heavy industry and aeronautics: Continental, on the German Dax, rose by nearly 9%; while Safran, in France, grew by 8.9%.

The rallies of the main indices had only one exception: energy companies, especially those most linked to hydrocarbons. In Spain, Repsol is among those that performed worst, with a reduction of close to 4.5%, surpassed only by the crash of the pharmaceutical company Rovi, which fell 16.5%. Naturgy also closed the day in the red, with a minimal erosion, less than 1%; while Iberdrola, Endesa, and Enagás all registered slight gains, also below one percentage point.

In the United Kingdom, the worst performing stock of the day was BP, with a 3.7% decrease; while in Germany, the energy company RWE suffered, losing 1.4%, and in France, TotalEnergies, 3.2%.