Australian shares bounced back from a more-than-one-month low on Tuesday, climbing 1.2% after the United States delayed a planned military strike on Iran, reviving hopes for a diplomatic resolution and easing fears of a wider conflict that could disrupt global energy supplies.
“I have been asked by the Emir of Qatar, Tamim bin Hamad Al Thani, the Crown Prince of Saudi Arabia, Mohammed bin Salman Al Saud, and the President of the United Arab Emirates, Mohamed bin Zayed Al Nahyan, to hold off on our planned Military attack of the Islamic Republic of Iran,” former President Donald Trump said in a statement on Truth Social. He cited “serious negotiations” as the reason for the delay.
The S&P/ASX 200 index rose 1.2% to 7,768.40, recovering from its lowest point in over a month. The move tracked a downturn in oil prices, with international benchmark Brent crude futures falling more than 2% to $109.15 per barrel and West Texas Intermediate futures declining 1.27% to $107.28 per barrel. The broader All Ordinaries index also gained 1.1%.
The delay in military action provides a temporary reprieve for markets that have been on edge since the conflict began. The closure of the Strait of Hormuz has already contributed to rising gasoline prices, with the national average in the US topping $4.50 a gallon, according to reports. The de-escalation saw energy stocks lead losses on the Australian market, falling 1.5%, while financials and real estate investment trusts gained 1.4% and 1.7%, respectively.
The request from Gulf leaders to postpone the strike is aimed at allowing more time for negotiations to proceed. Trump stated that any potential deal would require Iran to abandon its pursuit of nuclear weapons.
“This Deal will include, importantly, NO NUCLEAR WEAPONS FOR IRAN!” Trump wrote, adding that he had instructed the military to be prepared for a “full, large scale assault” if a deal is not reached.
The conflict has seen tensions rise across the region, with Iran and several Gulf states trading strikes and fighting continuing in Lebanon between Israel and Hezbollah. The fragile ceasefire, brokered by Pakistan, has been tested by these incidents.
In Washington, the conflict has drawn scrutiny from lawmakers. Congressman Richard Neal, a Democrat from Massachusetts, has been vocal about the lack of congressional involvement, citing repeated attempts to debate the War Powers Resolution concerning presidential accountability.
This article is for informational purposes only and does not constitute investment advice.
