Trump-Related Developments Put Global Markets on High Alert as Ceasefire Negotiations Near Critical Deadline

Middle East Conflict Escalates as US Allies Push for Last-Minute Deal with Iran

The situation in the Middle East remains tense as President Donald Trump extended his deadline to Tuesday for Iran to reopen the Strait of Hormuz, keeping global markets on edge over the possibility of a breakthrough in negotiations. According to Axios, Pakistan, Egypt, and Turkey are pushing for a potential ceasefire lasting approximately 45 days to prevent threatened US strikes on Iran's energy infrastructure and potential retaliation from Iran against countries in the region.

The fighting continued over the weekend, with Israel, Kuwait, and the United Arab Emirates reporting Iranian attacks. Trump on Sunday issued a warning to destroy Iran's power plants and blow up "everything over there," before announcing what appeared to be a new Tuesday 8 p.m. deadline, without offering details. This latest ultimatum adds to a series of extensions since Trump began issuing similar ultimatums on March 21 to force Iran to reopen the strategic waterway.

Despite ongoing negotiations between Trump's envoys and Iran's leadership, which have yet to be identified, the conflict has left thousands dead, most of them in Iran and Lebanon, and brought vessel traffic through Hormuz to a near standstill. Approximately a fifth of the world's oil and liquefied natural gas exports normally flow through the strait.

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Signs of last-ditch efforts to secure a ceasefire helped investors cautiously return to equities, with the MSCI Asia Pacific Index rising 0.3% and crude oil prices paring gains. Many European markets are closed.

Iran rejected Trump's latest ultimatum to reopen Hormuz, stating that operations will only be fully resumed when war damages are compensated. The country continued striking energy targets in Persian Gulf neighbors, including Kuwait's oil headquarters and a major petrochemicals plant in Abu Dhabi over the weekend. The UAE issued multiple alerts overnight, while Kuwait said its air defenses intercepted missile and drone attacks.

The Israel Defense Forces reported that Iran launched four waves of missiles since midnight, with emergency services recovering two bodies from a home struck earlier in Haifa. Fifteen ships have passed through the Strait of Hormuz with Iran's permission in the past 24 hours, which is still about 90% lower than before the start of the conflict.

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Oil prices rose after Trump's latest warnings, with Brent trading at approximately $110 a barrel at 6:30 a.m. in London. The global benchmark is up by more than 50% since the beginning of the conflict. In the US, average national retail gasoline prices have topped $4 a gallon for the first time since 2022, bringing political risk to the Trump administration and Republicans.

Trump plans a news conference at 1 p.m. on Monday, but it remains unclear whether a breakthrough can be reached. Both the US and Iran have rejected each other's demands, while Israel has made clear it wants to inflict further damage to Tehran's military capabilities.

The conflict has resulted in over 5,000 deaths, almost three-quarters of them in Iran, according to government organizations and the US-based Human Rights Activists News Agency. More than 1,400 people have been killed in Lebanon, and dozens of others died across Gulf Arab states and in Israel.

The US over the weekend rescued an airman from Iran in an operation involving dozens of aircraft over a mountainous area in the Islamic Republic. The mission followed the downing of a US military aircraft and spanned two days, involving hundreds of special operations troops.

House Intelligence Chairman Rick Crawford stated that the US sustained no casualties but destroyed "a couple" of aircraft on the ground in Iran to prevent them from falling into enemy hands. The downing of US aircraft has pierced the aura of invincibility Trump has sought to project.

Oil prices have been disrupted by the conflict and soaring costs for products such as jet fuel and diesel are threatening a renewed wave of inflation. OPEC members raised their production quotas for May, in a symbolic move as the war constrains output and shipments from several of the alliance's largest members.

Iran announced Saturday that Iraq would be exempt from its shipping restrictions in the strait, allowing for as much as 3 million barrels a day of Iraqi oil cargoes. An Iraqi official struck a cautious note, saying volumes would depend on whether shipping companies are willing to risk entering the strait.