THE MIDDLE EAST (AFP): President Donald Trump on Tuesday accused Iran of repeatedly violating the ceasefire with the US in the war in the Middle East, as both countries deliberate over a possible new round of peace negotiations.
"Iran has Violated the Cease Fire numerous times!" Trump said in a post on his Truth Social platform, referring to the two-week truce set to expire by Wednesday, after which the Middle East potentially could plunge back into open conflict.
Meanwhile, oil prices dipped and stocks edged higher Tuesday as investors held out hope that despite conflictual rhetoric there was scope for a deal to end the Middle East war and reopen the Strait of Hormuz to oil and gas shipments.
Iran had not yet sent a delegation to neighbouring Pakistan for a new round of peace talks with the United States, even as the two-week ceasefire is set to expire by Wednesday.
Brent North Sea crude, the international benchmark, was down around one percent after surging the previous day after Iran reclosed the Strait of Hormuz.
In Europe, the London, Paris and Frankfurt stock markets all traded higher in midday deals after gains in Asian markets.
"There is a reluctance for investors to price in the worst-case scenario for the conflict in the Middle East, and there is optimism within the market that the US/Iran ceasefire will be extended," said Kathleen Brooks, research director at trading group XTB.
The White House said Vice President JD Vance was ready to return to Pakistan for new negotiations to end a conflict that has sent crude soaring and revived inflation fears.
However, Iran's position remained uncertain as it accused Washington of violating their fragile truce through its blockade of the country's ports and the seizure of a ship.
US President Donald Trump has similarly accused Tehran of violating the ceasefire by harassing vessels in the Strait of Hormuz, the transit passage for about one-fifth of global oil.
Despite the uncertainty, analysts said investors remained largely upbeat that the two sides would eventually come to a deal that will reopen the strategic strait.
"Oil prices remained below $100 a barrel which suggests cautious optimism that the Middle East conflict won't intensify," said Russ Mould, investment director at AJ Bell.
"However, the longer oil remains in the 90s (dollar per barrel) range... the higher the chance of an inflationary shock and a wobble to global economic activity," he said.
Seoul led equity market gains in Asia thanks to a resumption of the tech rally that had propelled the Kospi to multiple records before the war, climbing 2.7 percent to hit an all-time high.
Tokyo and Taipei were also well up, with Hong Kong, Shanghai and Singapore also advancing.
Investors are also following the confirmation hearings for Kevin Warsh, Trump's choice to lead the Federal Reserve.
His testimony could shed light on the direction of US interest rates in the coming months, as the world's largest economy faces inflation risks and headwinds to growth.
But it comes as first-quarter earnings from dozens of companies have largely surpassed expectations, bolstering investor optimism that the Mideast War will not derail tech-led economic growth.
In Japan, defence firms saw healthy buying after Tokyo said it would ease decades-old export rules, paving the way for the sale of lethal weapons overseas. -- AFP
