Crude prices eased on Friday following remarks by Israeli Prime Minister Benjamin Netanyahu, who said Iran was being “decimated” and that the war would end earlier than many fear.
Traders also welcomed US President Donald Trump’s remarks that Israeli forces would not target any more of Tehran’s energy infrastructure, after strikes on a key gas field on Wednesday sparked warnings of retaliation against installations across the Gulf.
But with the conflict heading into a fourth week, Asian markets were mostly down as investors fret over energy impacts, as oil is still holding around $100 a barrel and gas has surged amid the virtual closure of the crucial Strait of Hormuz.
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Netanyahu told a news conference on Thursday that Israel and the United States were “winning and Iran is being decimated”, adding that the Islamic republic no longer had the capacity to enrich uranium or manufacture ballistic missiles.
“This war is ending a lot faster than people think,” he said without providing a specific timeframe.
Netanyahu also said he would help the United States try to secure Hormuz, through which a fifth of global oil and gas flows.
His comments came after Washington said there was no deadline to end the war launched against Iran on February 28.
Both main oil contracts sank on Friday, though they pared the losses as the day went on. Brent remains at around $108 and West Texas Intermediate about $94.
Iran warning, threat
Before Netanyahu’s comments, crude had soared to as high as $119 after Tehran struck a number of energy sites around the Gulf in retaliation for Israel’s attack on its South Pars field.
Asked whether he had talked to the prime minister about attacking Iranian gas fields, Trump replied: “I did. I told him, don’t do that, and he won’t do that.
“You know, we’re independent. We get along great. It’s coordinated, but on occasion, he’ll do something, and if I don’t like it… and so we’re not doing that anymore.”
He had warned Iran earlier that US forces would “massively blow up” the South Pars field if Tehran did not stop attacking Qatar, to which Iran said it would have “zero restraint” if its energy infrastructure was hit again.
Meanwhile, French President Emmanuel Macron said his country planned to talk with permanent members of the UN Security Council about establishing a UN framework – once the ongoing exchange of fire had ended – to secure navigation in the Strait of Hormuz.
Strikes continue
But, in a sign that the conflict is unlikely to end soon, Israel launched a wave of strikes on Tehran on Friday as Gulf nations faced fresh attacks, while Iran continued to target neighbours with an oil refinery in Kuwait set alight after a drone attack.
The United States and Israel also struck 16 Iranian cargo vessels in port towns on the Gulf on Friday, local media reported, saying the ships were burnt.
Later, Iran’s military threatened to hunt down officials and army commanders from the United States and Israel even while they were vacationing or visiting entertainment centres.
“We are watching your cowardly officials and commanders, pilots and wicked soldiers,” armed forces spokesman Abolfazl Shekarchi said, quoted by state TV.
“From now on, based on the information we have on you, the promenades, resorts and tourist and entertainment centres in the world will not be safe for you either.”
Asian markets mostly down
Most Asian stock markets fell on Friday as nervous traders awaited positive developments in the crisis.
Hong Kong, Shanghai, Sydney, Singapore, Taipei and Wellington were all down, though Seoul, Mumbai and Bangkok rose. Tokyo was closed for a holiday.
London, Paris and Frankfurt opened higher.
“Netanyahu’s remarks have poured a layer of soothing balm over sentiment, with talk of securing the Strait and claims that Iran’s nuclear and missile capabilities have been neutralised, feeding the idea that this conflict could burn out faster than feared,” Stephen Innes at SPI Asset Management wrote.
“That narrative matters because it shortens the perceived life of the supply shock. But even if the geopolitical chapter closes sooner than expected, the energy system does not reset on command.
“You do not rebuild liquefaction trains, repair export terminals, or restore confidence in global shipping lanes with a press conference.”
China urged all sides to end the war in Iran, warning on Friday of the impact on global energy, shipping and trade.
“History and reality have repeatedly shown the world that force is not the solution to problems and armed conflict will only breed new hatred,” Foreign Ministry spokesman Lin Jian said.
Fuel impacts across Southeast Asia
The tanker blockade in the Gulf and Strait of Hormuz has rocked countries all across Asia and the Pacific.
In Southeast Asia, governments have faced panicked buying and a shortage of imported fuel. That has meant shortages of gas for cooking and a surge in diesel and petrol prices.
In Vietnam, the cost of petrol rose more than 20% on Friday after the government announced an increase in the price of 95-octane gasoline to 30,690 Vietnamese dong ($1.20) per litre, while diesel was hiked nearly 34% to 33,420 dong.
It said Prime Minister Pham Minh Chinh had phone talks asking for fuel support from countries such as Qatar, Kuwait, Algeria and Japan.
The aviation authority has warned of a possible reduction in domestic flights because of potential fuel shortages. But state media quoted officials as saying the country can ensure enough oil and gas for domestic consumption until the end of April.
Neighbouring Laos on Thursday ordered all schools nationwide to cut their week to three days starting next week, as fuel shortages and higher prices disrupted transport and daily life across the landlocked country.
In Myanmar, prices at the pump increased about 30% from Thursday into Friday. AFP journalists saw long queues of vehicles at a petrol station near Mandalay as motorists rushed to fill their tanks.
Thailand also saw fuel price rises this week, with the new government announcing higher diesel rates on Wednesday.
AFP with additional input and editing by Jim Pollard
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