Oil Prices Rise, Global Stocks Fall, US-Iran Tensions Continue

Oil prices remained elevated on Tuesday amid ongoing tensions between the United States and Iran, with investors monitoring developments in the Strait of Hormuz. This followed a sharp rise on Monday, when Brent surged nearly 6% above $114 a barrel. The fragile ceasefire was tested after the U.S. military reported sinking six Iranian small boats targeting civilian ships.

Two U.S.-flagged vessels successfully transited the strait the same day. The key waterway for oil transport stays largely closed despite U.S. demands for Iran to reopen it, compounded by a U.S. sea blockade on Iranian ports.

Trump warned that Iran would be "blown off the face of the earth" if it targeted U.S. ships protecting commercial vessels. He also noted a South Korean cargo ship came under fire from Iran in the strait, suggesting South Korea join the mission. Separately, the United Arab Emirates faced attacks from Iranian drones and missiles, heightening fears of a broader conflict collapse.

" — President Donald Trump, in a Truth Social post (CNBC). U.S. ships, but the incidents contributed to Monday's market volatility. Stock indices closed sharply lower, with the Dow tumbling 500 points and oil spiking 5.7% to $114.28 for Brent.

European stocks were set to open mostly lower, with Germany's DAX and France's CAC 40 expected down 0.4%, the U.K.'s FTSE flat, and Italy's FTSE MIB 0.1% lower. Trading was thin with markets in Japan, South Korea, and mainland China closed for holidays.

U.S. futures edged 0.1% higher overnight, but broader concerns persisted over potential global recession risks from prolonged war disrupting energy supplies. Before the conflict began in late February, Brent traded near $70 per barrel.

Economic growth forecasts for the island of Ireland reflected impacts from the fuel crisis triggered by the Middle East conflict. Consultancy firm EY projected Ireland’s GDP to grow 1.8% in 2026 and 4.2% in 2027, with inflation at 3.1% this year due to the Strait of Hormuz shutdown affecting a fifth of global oil supplies.

Northern Ireland’s economy was forecast to grow at a slower rate, with jobs expanding 0.6% annually through 2027. " — Dr Loretta O’Sullivan, chief economist at EY Ireland (The Independent). Chevron's chief executive warned of emerging physical shortages in crude oil, predicting hits to Asian economic growth first.

He noted demand must adjust to supply constraints, with economies likely to slow. This came as energy importers scrambled for alternatives, including Japan receiving its first crude shipment from new sources. HSBC reported first-quarter pretax profit of $9.4 billion, slightly missing estimates, amid the volatile environment.

Other firms like Anheuser-Busch InBev were due to release earnings.

The conflict has adversely affected inflation outlooks, with EY noting less severe shocks than post-Ukraine invasion but still prompting cautious hiring. Irish unemployment was expected to remain low at 5% in 2027, while consumer spending continues.

EY officials highlighted businesses navigating military, economic, and technological challenges from geopolitics. The Irish economy showed resilience last year but faces moderation in 2026 from energy volatility. Prior to the war, oil markets were stable, but current elevations stoke recession fears if disruptions persist.