Oil retreats as Netanyahu’s comments ease market jitters

Edited by Orla Ryan in Hong Kong, Peter Wells in New York and Kieran CashBenjamin Netanyahu says Israel and the US are wiping out Iran's ability to create a nuclear weaponBenjamin Netanyahu said joint US-Israel strikes had destroyed Iran’s ability to enrich uranium and to produce ballistic missiles and that he saw “this war ending a lot faster than people think”.South Korean stocks gained 0.5 per cent in early trading on Friday, following the Israeli prime minister’s comments. Oil retreated to $107 a barrel and the US’s S&P 500 closed 0.3 per cent lower after a late rally.Treasury secretary Scott Bessent said the US could order a second release from its strategic petroleum reserve in an effort to push down prices. But the White House was not considering a ban on oil exports, a senior official told the FT.Donald Trump said he had reprimanded Netanyahu for Israeli strikes on Iran’s energy fields, including the South Pars attack that drew retaliation from Tehran. Netanyahu later said Israel acted alone.Some content could not load. Check your internet connection or browser settings.William Sandlund in San Francisco Chinese stocks rose in early trading on Friday after comments from Israel that the war would end “faster than people think” sent oil prices lower. Mainland China’s CSI 300 rose 0.6 per cent while Hong Kong’s Hang Seng index edged down 0.3 per cent. Prices for Brent fell 3 per cent to $105.42 a barrel. The renminbi gained 0.2 per cent against the dollar to Rmb6.89 after it weakened 0.4 per cent on Thursday to hit Rmb6.90. Yields on Chinese 10-year government bonds were flat at 1.82 per cent.Alice Hancock in Brussels, Jamie John and Nassos Stylianou in LondonIran is letting a handful of vessels use its territorial waters to pass through the Strait of Hormuz, which shipping executives believe is designed to demonstrate Tehran’s control of the strategic waterway. At least eight vessels have this week transited the strait by taking an unusual route around Larak Island, off the coast of Iran, according to FT analysis of transponder signals from MarineTraffic, a ship-tracking platform. The vessels include a mixture of oil tankers and bulk carriers from India, Pakistan and Greece, as well as Iran’s own oil fleet. Most of the vessels had previously called at Iranian ports.William Sandlund in San FranciscoSouth Korean stocks recovered slightly in early trading on Friday after oil prices fell following Israeli Prime Minister Benjamin Netanyahu’s comments that the war in the Middle East would end “a lot faster than people think”. South Korea’s Kospi gained 0.5 per cent after closing 2.7 per cent lower in the previous session. Markets in Japan were closed for a public holiday. Prices for Brent crude fell 1.5 per cent to $107.04 a barrel. On Thursday oil prices rose as high as $119.13 before falling after Netanyahu’s statement. The dollar edged up 0.1 per cent against a basket of key trading partners and yields on 10-year US Treasuries dropped 0.03 percentage points to 4.25 per cent. Bond yields move inversely to prices.Henry Foy in BrusselsThe EU will stick to its promise to end all imports of Russian liquefied natural gas by the end of the year despite the global gas supply shock caused by the war in the Middle East.“We have our clear targets and we are sticking to our clear targets,” European Commission president Ursula von der Leyen told reporters early on Friday Brussels time when asked if the EU would delay its phaseout in response to the damage to LNG production capacities in Qatar and disruption to global gas markets. “We are on track on the mid- and the long-term and our goals are very clear,” she said.EU leaders on Thursday agreed to what von der Leyen said were “temporary, tailored and targeted” measures to alleviate the immediate impact of energy price increases on the continent.Ian Johnston in BrusselsEuropean countries want the European Commission to help them design “temporary and targeted measures” to tackle high energy costs, according to draft proposals from a meeting of the continent’s leaders.The proposal, seen by the FT, calls for the Commission to “work closely with member states to design national temporary and target measures to mitigate significant impacts of fuels and related-cost components on electricity generation costs”.It has yet to be agreed by member states, which are gathering in Brussels for a European Council meeting. The measures also call for a review of the bloc’s carbon costs scheme, the emissions trading system, to be completed by July 2026.FT reportersLebanon’s Prime Minister Nawaf Salam said his government was ready to “enter into immediate negotiations with Israel” in a message directed to US President Donald Trump.“We have been for two weeks extending our hands to have direct talks with the Israelis — so far we haven’t received an agenda,” Salam said during an interview with CNN on Thursday in response to a question about whether Lebanon would normalise ties with Israel as part of a peace deal.Lebanon’s President Joseph Aoun last week called for direct negotiations with Israel as part of a peace initiative.Salam suggested Beirut would not accept any Israeli occupation of Lebanon’s territory as part of a possible negotiated truce.George Steer in New YorkUS stocks pared earlier losses and Treasuries rallied after Israel’s Prime Minister Benjamin Netanyahu said Iran can no longer enrich uranium.Wall Street’s S&P 500 closed 0.3 per cent lower on Thursday after recovering most of its earlier losses. Yields on two-year Treasuries, which had earlier surged as high as 3.96 per cent, fell to 3.8 per cent.Brent crude was 0.6 per cent lower at $106.72 a barrel and the dollar slipped against a basket of six other major currencies.Traders said markets starved of positive developments had overreacted to Netanyahu’s remarks on Israel working to reopen the Strait of Hormuz.This afternoon, “we caught a glimpse of how markets will react if [and] when people think that the Strait of Hormuz will open”, said Mike Zigmont at Visdom Investment Group.“Non-progress [on] the Strait of Hormuz is a risk-off force. The risk-on trades need to get titbits of hope or actual news of progress now.”Mike O’Rourke at JonesTrading said Netanyahu’s “incremental” remarks were enough to trigger a small reversal across markets.Neri Zilber in Tel AvivBenjamin Netanyahu said joint US-Israel strikes on Iran had destroyed Tehran’s ability to enrich uranium and to produce ballistic missiles. Israel’s prime minister on Thursday said that while he was not “putting a stopwatch on it”, he saw “this war ending a lot faster than people think”.Benjamin Netanyahu says Israel and the US are wiping out Iran's ability to create a nuclear weaponNetanyahu also said Israel acted alone in striking Iran’s South Pars gasfield, but added his nation would “hold off on future attacks” on the field at the request of US President Donald Trump.The prime minister’s remarks came a day after an Israeli strike on the massive offshore field rocked energy markets and led Iran to escalate its fire targeting oil and gas installations across the region.Trump also sought to distance himself from the Israeli attack, claiming he had no prior knowledge.Read more hereComments have not been enabled for this article.