Author: Fiona Craig

Oil prices remained above $110 per barrel on Tuesday as investors weighed reports of a tanker fire near Dubai against indications that U.S. President Donald Trump may be considering winding down military operations against Iran.

As of 04:49 ET (08:49 GMT), Brent crude futures for May delivery, the global benchmark, edged up 0.1% to $112.87 per barrel, while West Texas Intermediate (WTI) futures fell 0.4% to $102.49 per barrel.

Crude prices initially spiked earlier in the session after a Kuwaiti oil tanker caught fire near Dubai’s port area. The vessel’s owner said the blaze was the result of an Iranian attack.

However, gains eased somewhat after a Wall Street Journal report said Trump had told advisers he might be willing to end the military campaign against Iran even if the Strait of Hormuz remains closed. According to the report, Trump and his team believe that reopening the crucial waterway would likely take far longer than the four-to-six-week timeline originally envisioned for the conflict.

Instead, Washington may seek to reduce hostilities after achieving its primary objectives, including weakening Iran’s naval capabilities and damaging its missile systems. The U.S. would then try to persuade Tehran through diplomatic channels to reopen the strait and could also encourage European and Gulf allies to take the lead in restoring shipping access.

A potential reduction in U.S. military activity could mark a step toward de-escalation, particularly as Iranian officials have previously demanded such a move before engaging in direct negotiations with Washington.

Nevertheless, a prolonged shutdown of the Strait of Hormuz would continue to threaten global oil supplies, given that around 20% of the world’s crude passes through the narrow passage.

Oil on track for one of its largest monthly gains

Both Brent and WTI crude were heading for a dramatic increase in March, with prices projected to rise between 50% and 54%, representing one of the strongest monthly performances on record.

The rally reflects growing risk premiums and fears of supply disruptions tied to the conflict with Iran. Tehran has effectively blocked the Strait of Hormuz and has targeted oil tankers and energy infrastructure in neighboring Persian Gulf states, intensifying concerns about sustained disruptions to crude supply.

Several Gulf nations have temporarily halted oil production and exports over the past month as the conflict escalated.

Conflicting signals about the state of the war have also contributed to market volatility. Iranian officials have repeatedly stated that no direct talks with the United States have taken place since the conflict began, contradicting claims from Washington that negotiations were progressing.

Meanwhile, the United States has reportedly deployed thousands of additional troops to the Middle East. President Trump has also reiterated threats to strike Iran’s energy infrastructure and potentially water facilities if the Strait of Hormuz is not reopened by April 6.

Diplomatic efforts to ease tensions are ongoing, with Pakistan offering to host regional ceasefire negotiations in Islamabad.

Over the weekend, Yemen’s Iran-backed Houthi movement entered the conflict by launching attacks against Israel, raising concerns that the war could widen further, particularly given the group’s ability to target vessels traveling through the Red Sea.

Inflation across the Eurozone picked up in March as energy prices surged amid the conflict in Iran, though the increase came in slightly below economists’ expectations.

Consumer prices across the 21 countries using the euro rose 2.5% year-on-year in March, up from 1.9% in February, a month that largely preceded the escalation of fighting in the Middle East. Economists had forecast inflation at 2.6%.

Even so, the figure remained well above the European Central Bank’s 2% inflation target. ECB officials have recently indicated that interest rate increases could be considered as policymakers respond to the inflationary impact of the joint U.S.-Israeli military action against Iran that began in late February.

The sharp rise in oil and gas prices has been one of the defining features of the conflict. Eurozone energy costs climbed 4.9% in March, reflecting disruptions linked to the war. The effective shutdown of the Strait of Hormuz — a key shipping route off Iran’s southern coast through which roughly one-fifth of the world’s oil supply passes — has restricted global energy flows.

Europe has also grown more dependent on natural gas imports from the Persian Gulf since Russia’s invasion of Ukraine in 2022. Production facilities in the region have recently been targeted by Iranian air strikes, adding further uncertainty to energy markets.

While the ECB would typically look through temporary price shocks, ECB President Christine Lagarde has indicated that policymakers are prepared to react even if inflationary pressures prove only moderately persistent. Officials are particularly concerned that the spike in energy prices could feed into broader inflation across the economy.

Prices for services — a key component of Eurostat’s inflation data and an important driver of domestic price pressures — eased slightly, rising 3.2% in March compared with 3.4% the previous month.

The ECB, which is scheduled to meet again on April 30, is now widely expected to raise interest rates three times this year, with the first increase potentially coming as soon as next month or in June.

“[T]he longer the shock lasts, the higher the risk of second-round effects causing broader elevated inflation,” said Bert Colijn, Chief Economist, Netherlands, at ING in a note.

“[L]ooking ahead, you cannot see the energy price increase in isolation. It’s all about the Middle East, which dominates the inflation outlook, and not just when it comes to energy prices, but also expect upside risk to food and goods prices given fertiliser shortages and broader supply chain problems stemming from the war.”

Shares of Getlink (EU:GET) gained over 4% on Tuesday after Italian infrastructure group Mundys announced plans to increase its holding in the cross-Channel transport operator to as much as 25%, subject to regulatory clearance.

Mundys said Monday that it will immediately acquire 3.5% of Getlink’s share capital, while securing an option to purchase a further 6%, pending approval from the UK government under the National Security and Investment Act 2021. That decision is expected by April.

The investment will be executed through Mundys’ wholly owned subsidiary, Aero 1 Global & International S.à r.l.

Once the initial transaction is completed, Mundys will own 19% of Getlink’s share capital and up to 24.9% of its voting rights. If regulatory approval is granted, the group’s stake could increase to 25% of the company’s capital and up to 29.9% of voting rights.

These figures are based on Getlink’s capital structure of 550 million shares and 699,916,029 voting rights, as reported on March 11.

Mundys also noted it could consider further purchases depending on market conditions, though it emphasized that it has no plans to take control of the company or seek additional board representation. The group said the move builds on its long-term partnership with Getlink, which began in 2018.

Mundys, controlled by Edizione with Blackstone as its second-largest shareholder, operates motorway and airport concessions in 24 countries. France represents its biggest market, accounting for 28% of EBITDA in 2025.

Gold prices moved higher during Asian trading on Tuesday, drawing some renewed buying interest after suffering steep declines throughout March as rising inflation expectations tied to the U.S.–Israel conflict with Iran pressured non-yielding assets such as precious metals.

Metals markets were also supported by reports that U.S. President Donald Trump is considering scaling back military operations against Iran, as the conflict appears likely to stretch beyond the four-to-six-week timeframe initially anticipated.

Additional support came after Federal Reserve Chair Jerome Powell said long-term inflation expectations remain well anchored despite potential short-term disruptions.

Spot gold rose 1% to $5,556.54 per ounce at 01:17 ET (05:17 GMT), while gold futures gained 0.6% to $4,587.01 per ounce.

Other precious metals also strengthened on Tuesday. Spot silver climbed 2.7% to $71.9805 per ounce, while spot platinum increased 0.8% to $1,914.85 per ounce, although both metals remain on track to record sizable losses for the month of March.

Trump may end Iran campaign without reopening Hormuz – WSJ

According to a report by the Wall Street Journal on Monday evening, Trump told advisers he could be willing to conclude the military campaign against Iran even if the Strait of Hormuz remains closed.

Officials cited in the report believe that an operation to fully reopen the strait would likely extend the conflict beyond the president’s initial timeline and could require a complicated military effort.

Instead, Trump is said to believe the U.S. could begin winding down hostilities after achieving core objectives, including weakening Iran’s naval strength and degrading its missile capabilities.

Washington would then attempt to pressure Tehran through diplomatic channels to reopen the strait, while also encouraging European and Gulf allies to take the lead in restoring maritime access.

The report raised some optimism that the conflict might eventually ease, although a continued closure of the Strait of Hormuz — which carries roughly 20% of global oil supply — would likely keep energy prices and inflation concerns elevated.

Gold heading for worst month in nearly two decades

Despite Tuesday’s modest rebound, gold prices remain on course for their weakest monthly performance in almost 20 years.

Spot gold was down about 14% in March, which would also end a seven-month streak of gains for the precious metal.

The metal has come under pressure as investors reassess expectations for further interest rate cuts from the Federal Reserve. The surge in oil prices following the outbreak of the Iran conflict has boosted inflation expectations, dampening hopes for monetary easing.

At the same time, several major central banks — including the European Central Bank and the Bank of Japan — have indicated that interest rate hikes could be considered to counter energy-driven inflation, pushing bond yields higher and reducing the appeal of non-yielding assets like gold.

These pressures have also weighed on other precious metals. Spot silver has fallen roughly 23% this month, while platinum is on track to drop about 19% in March.

Goldman Sachs says the risk of stagflation has returned to the discussion around European equities, as rising energy prices linked to the Middle East conflict combine with weaker economic growth forecasts across the region.

According to the bank’s strategists, the geopolitical tensions have shifted the macroeconomic backdrop away from the previously favourable “Goldilocks” environment. Goldman’s commodities team has increased its energy price projections, now expecting Brent crude to average $80 per barrel in the fourth quarter of 2026, compared with $60 before the conflict. European gas prices are also forecast higher, with TTF expected at €40 per megawatt-hour, up from the earlier €30 estimate.

At the same time, Goldman’s economists have downgraded their outlook for eurozone growth. GDP is now projected to expand 0.7% year-on-year in the fourth quarter, down from the 1.4% forecast before the conflict. Inflation expectations have also moved higher, with headline inflation now predicted to reach 3.2% by the second quarter, compared with the previous 2% estimate.

In response to these developments, central banks have adopted a more hawkish stance. The European Central Bank is now expected by markets to deliver three rate hikes this year, whereas prior to the conflict interest rate expectations had been broadly stable.

Goldman does not yet view stagflation as its base-case scenario, but warns that the risk profile has deteriorated. The bank noted that “the balance of risks has worsened and the probability of a stagflationary outcome has increased.” Strategists also highlighted that macroeconomic sensitivities tend to be non-linear, meaning downside risks could intensify if disruptions to shipping through the Strait of Hormuz persist.

Historically, stagflationary periods have been difficult for equity markets. Goldman’s analysis shows that the median real quarterly return for the STOXX 600 drops to around -1% during stagflation, compared with +3% in other economic environments.

“Stagflation exerts a double pressure on equities by (1) compressing fundamentals via margin pressure and (2) compressing valuations via higher rates and a more uncertain earnings outlook,” strategists led by Guillaume Jaisson said in a note.

Despite the growing risks, the bank believes equity markets have not fully priced in a stagflation scenario. While sector rotation has started to resemble a typical stagflation pattern — with Energy, Value stocks and Defensive sectors outperforming Growth and Cyclical names — the overall level of major indices suggests investors still expect the shock to remain manageable.

“Sharp policy repricing has created a regime within a regime,” the strategists wrote, adding that the current environment is producing sudden and sometimes non-linear sector shifts that make it difficult to identify consistent winners and losers.

From a positioning perspective, Goldman continues to favour a defensive approach. The bank is overweight Telecoms and Consumer Staples, while underweighting Consumer Discretionary, Autos and Chemicals.

It also sees opportunities in Defence and Fiscal Infrastructure, and continues to view European banks as an attractive value play for investors who believe stagflation risks will ultimately fade, citing resilient earnings profiles and strong income characteristics.

Ashmore Group PLC (LSE:ASHM) announced on Tuesday that it has entered into a strategic partnership with Japan Post Insurance, which includes a $1 billion investment commitment to its emerging markets funds along with the purchase of an equity stake in the company.

As part of the agreement, Japan Post Insurance plans to allocate $1 billion across a selection of Ashmore’s emerging markets investment strategies. The capital will be deployed gradually over roughly 12 months rather than being invested all at once.

In addition to the fund investment, Japan Post Insurance intends to build a 2.9% shareholding in Ashmore Group through purchases in the open market. The company did not provide a timeline for when those share acquisitions will take place.