Netanyahu’s Comments Trigger Oil Sell-Off, Lifting Equities and Bonds

Risk assets recovered overnight and gold eased after Benjamin Netanyahu said the war with Iran should end sooner than most expect. The other major development was news that Israel is working with the US to reopen the Strait of Hormuz. Oil prices fell sharply in the final hour of trade.

The day began with fresh concern in energy markets. Overnight Iranian strikes hit several Gulf LNG facilities, including major damage at Qatar’s Ras Laffan complex. That sent Brent and European natural gas sharply higher early on. WTI traded weaker on talk of a possible US export ban, and the spread between WTI and Brent widened to levels not seen since 2015.

As the session wore on, a steady stream of updates began to shift sentiment. Treasury Secretary Scott Bessent said the US could remove sanctions on some Iranian oil already on the water. Israeli officials confirmed the South Pars strike was a one-off action carried out in coordination with Washington. Politico then reported there was no US export ban under consideration. President Trump added that the Iran situation should be resolved soon.

The decisive shift came around 3pm ET when Netanyahu spoke directly. He said Iran can no longer enrich uranium or build ballistic missiles, and that the conflict is moving towards a faster-than-expected conclusion. By setting out a clear objective and suggesting it has effectively been achieved, he made an end to the conflict seem increasingly within reach.

WTI fell from above $100 to a low near $93 before trimming some of the move. Brent followed a similar path. The drop in oil helped stabilise equities. The Dow, S&P 500 and Nasdaq had all broken below their 200-day moving averages during the morning sell-off, but recovered later to close around those levels. Small caps finished in the green, helped by a solid short squeeze. Energy stocks gave back earlier gains and ended lower.

The US dollar weakened against the euro and pound for most of the day before steadying late. Gold fell through its 50-day and 100-day moving averages to six-week lows. Stepping back, gold has had a tremendous run with very few pullbacks. For now, it appears to have found support around candlestick levels from January and February. For dip buyers, this may prove to be an attractive entry point.