Oil stays off the market. Prices fell a couple dollars, but they're still 55 percent above pre-war levels.
In the uneasy arithmetic of global markets, a modest retreat in oil prices offered little comfort against the backdrop of a diplomatic impasse that shows no sign of resolution. U.S. stock futures climbed on the strength of technology earnings, yet crude remained more than half again its pre-war price, a persistent burden on every economy that runs on imported energy. With Washington and Tehran unable to find common ground over the Strait of Hormuz, the world's financial markets are learning to price in a prolonged disruption rather than a passing crisis.
- Oil fell overnight but remains 55% above pre-war levels, and gasoline at $4.30 a gallon is a daily reminder that the Strait of Hormuz closure is not an abstraction.
- President Trump's rejection of Iran's strait-reopening proposal extinguished the market's last near-term hope for relief, pushing Brent toward its highest levels since the 2008 financial crisis.
- Technology earnings split the room: Alphabet's 7.4% surge on AI-driven profits pulled futures upward, while Meta's 9% plunge on heavy spending forecasts unsettled investors who had expected a cleaner win.
- Central banks in the U.S., U.K., and Japan all held rates steady, a synchronized pause that signals policymakers are watching the energy shock carefully before committing to any new direction.
- Asian markets mostly retreated while China quietly held its ground, its factory activity still expanding — a data point suggesting the world's second-largest economy is absorbing the energy shock better than its neighbors.
Wednesday morning delivered a familiar contradiction: oil prices slipping while stock futures climbed, a surface calm that concealed deeper anxieties. The S&P 500, Dow, and Nasdaq all edged higher before the opening bell, carried by a wave of technology earnings. But the relief was partial at best. Brent crude settled at $108.51 per barrel after a modest overnight decline — still 55 percent above the roughly $70 it commanded before the war broke out in late February. At the pump, Americans were paying $4.30 a gallon, a dollar-twelve more than a year prior.
The Strait of Hormuz, through which a fifth of the world's crude ordinarily passes, remains closed, and the diplomatic path to reopening it narrowed further. Reports that President Trump had rejected Iran's proposal to restore passage effectively ended hopes for a near-term settlement. Strategists at ING Bank noted that the collapse of talks had removed the market's last plausible source of quick relief, with Brent now approaching levels not seen since the 2008 financial crisis peak of $147.50.
In equities, the earnings season was telling two stories at once. Alphabet surged 7.4 percent after reporting a first-quarter profit of $62.6 billion — an 81 percent year-over-year jump — with CEO Sundar Pichai crediting artificial intelligence investments for illuminating every corner of the business. Meta told a more complicated story: despite a 61 percent earnings increase, its shares fell 9 percent after the company raised its capital expenditure forecast, unnerving investors who read the guidance as a signal of heavy spending ahead.
Central banks on three continents held their rates steady — the Federal Reserve, the Bank of England at 3.75 percent, and the Bank of Japan — each pausing to assess the economic weight of the energy disruption. London's FTSE 100 rose 1.3 percent on the Bank of England's decision, though Paris and Frankfurt dipped. Across Asia, most markets retreated, with Tokyo, Seoul, and Hong Kong all losing ground. Shanghai was a quiet exception, edging slightly higher as Chinese factory data showed the economy still expanding, a resilience that stood out against the broader regional retreat.
The overall picture was of markets suspended between two competing forces: the genuine excitement of AI-driven corporate growth on one side, and the grinding reality of elevated energy costs and a geopolitical stalemate on the other. With no resolution in sight at the negotiating table, analysts broadly expected crude to remain elevated and gasoline expensive well into the months ahead.
The morning brought a familiar contradiction: oil prices retreating while stocks climbed, a divergence that masked deeper anxieties about energy supply and geopolitical stalemate. U.S. stock futures ticked upward before the opening bell—the S&P 500 up 0.4%, the Dow up 0.6%, the Nasdaq up 0.5%—buoyed by the earnings reports trickling in from the country's largest technology firms. Yet beneath this modest optimism lay a harder reality: crude remained stubbornly elevated, and the diplomatic breakdown between Washington and Tehran suggested no quick relief was coming.
Brent crude for June delivery fell $1.93 overnight to settle at $108.51 per barrel, a decline that might have seemed encouraging in ordinary times. But these are not ordinary times. Before the war erupted in late February, Brent was trading around $70 a barrel. The current price represents a 55 percent premium, a tax on every economy that depends on imported energy. U.S. crude fell $2.37 to $104.51, yet the pain at the pump continued to mount. Regular gasoline averaged $4.30 a gallon Thursday morning, up seven cents overnight and a full dollar-twelve higher than the same date a year prior, when it cost $3.18.
The blockade of Iranian ports and the closure of the Strait of Hormuz—through which roughly a fifth of the world's crude ordinarily flows—remain the primary culprits. But what kept prices elevated despite the modest decline was the news from the negotiating table: reports suggested President Trump had rejected Iran's proposal to reopen the strait, effectively closing the door on a near-term settlement. Strategists at ING Bank captured the market's mood plainly: the collapse of talks had extinguished hope for any quick resumption of oil flows. By some measures, Brent had climbed to its highest level since the 2008 financial crisis, when it peaked at $147.50 per barrel.
In the equity markets, the earnings season was delivering mixed signals. Alphabet, Google's parent company, surged 7.4 percent after posting another quarter of robust growth powered by its artificial intelligence investments. The company earned $62.6 billion, or $5.11 per share, during the first quarter—an 81 percent jump from the same period a year earlier. CEO Sundar Pichai described the AI bets as lighting up every corner of the business, a characterization that clearly resonated with investors. Meta, by contrast, stumbled despite delivering better-than-expected results. The owner of Facebook and Instagram tumbled 9 percent after raising its forecast for capital expenditures, signaling that the company expected to spend heavily on infrastructure and development in the quarters ahead. Meta's earnings of $26.77 billion, or $10.44 per share, represented a 61 percent increase from the prior year, yet the guidance spooked traders.
Across the Atlantic, central banks held their ground. The Bank of England kept its main interest rate at 3.75 percent, a decision widely expected as policymakers weighed the economic fallout from the Iran conflict and the effective closure of the Strait of Hormuz. The U.S. Federal Reserve had made the same choice a day earlier, and Japan followed suit on Tuesday. Britain's FTSE 100 climbed 1.3 percent on the news, but continental Europe was less buoyant. France's CAC 40 lost 1.1 percent and Germany's DAX dipped 0.2 percent.
Asian markets mostly retreated. Tokyo's Nikkei 225 shed 1 percent to close at 59,284.92, while South Korea's Kospi fell 1.4 percent to 6,598.87. Hong Kong's Hang Seng lost 1.3 percent to 25,776.53. Shanghai managed a slight gain, closing 0.1 percent higher at 4,112.16, as China's factory activity for April slowed marginally but remained in expansion territory for the second consecutive month—a resilience that suggested the world's second-largest economy was weathering the global energy shock. Australia's S&P/ASX 200 was down 0.2 percent, Taiwan's Taiex fell 1 percent, and India's Sensex lost 0.5 percent.
The picture that emerged was one of markets trying to parse competing forces: the promise of artificial intelligence driving corporate profits against the drag of elevated energy costs and geopolitical uncertainty. Oil prices had eased, but not enough to suggest relief was imminent. The stalled talks between the U.S. and Iran, and Trump's apparent rejection of any quick reopening of the Strait of Hormuz, signaled that the energy supply constraints would persist, keeping crude elevated and gasoline expensive for months to come.
Citas Notables
The breakdown of talks between the U.S. and Iran, along with President Trump reportedly rejecting Iran's proposal for reopening the Strait of Hormuz, has the market losing hope for any quick resumption in oil flows.— ING Bank strategists Warren Patterson and Ewa Manthey
AI investments are lighting up every part of the business.— Alphabet CEO Sundar Pichai
La Conversación del Hearth Otra perspectiva de la historia
Why did oil prices fall when the geopolitical situation seems to be getting worse, not better?
It's a small retreat, not a reversal. Crude had spiked sharply in recent days on escalation fears, so Thursday's decline was partly profit-taking. But you're right that the underlying picture is darker—the talks have broken down, Trump rejected Iran's proposal, and the blockade remains in place. The market was pricing in some hope for a deal. When that evaporated, it actually supported the case for prices staying high.
So the oil market is saying what, exactly?
That we're stuck. The Strait of Hormuz is closed. Iranian ports are blockaded. A fifth of global crude normally flows through there. Until there's a political settlement, that oil stays off the market. Prices fell a couple dollars, but they're still 55 percent above pre-war levels. That's the new normal.
And the stock market went up anyway?
Because Big Tech earnings were strong, particularly Alphabet. AI investments are paying off in real revenue growth. But Meta's warning about higher capital spending spooked investors—it suggested the AI boom might be expensive to sustain. So you had one giant tech company soaring and another stumbling, even though both beat expectations.
What does that tell you about where investors think this is headed?
Uncertainty. Central banks are holding rates steady because they're trying to figure out the economic impact of the energy shock. If oil stays at $108 a barrel and gasoline at $4.30 a gallon, that's a drag on consumer spending. But if AI-driven productivity gains accelerate, that could offset it. The market is hedging both bets.
Is there a scenario where this resolves quickly?
Only if the U.S. and Iran reach a deal. But Trump just rejected Iran's proposal for reopening the strait. That suggests he's not interested in a quick settlement. So we're probably looking at months of elevated energy prices and the economic friction that comes with them.