Oil prices have fallen sharply amid tentative hopes for a deal to end the US-Israel war on Iran.
Brent crude, the primary benchmark for global oil prices, fell more than 5 percent on Sunday as US President Donald Trump gave mixed signals on the prospects for a permanent end to the conflict.
Brent futures for July stood at $97.94 a barrel as of 04:00 GMT, down about 9 percent from a month ago but still up by more than a third compared with before the start of the war.
Japan’s benchmark stock index, the Nikkei 225, surged more than 3 percent in morning trading, hitting an all-time high after closing at a record peak on Friday.
Trump said in a social media post on Sunday that negotiations with Tehran were proceeding in an “orderly and constructive manner”, but he had instructed officials “not to rush into a deal”.
“Both sides must take their time and get it right. There can be no mistakes!” Trump wrote on Truth Social.
Trump’s remarks came after he raised hopes for a breakthrough on Saturday by announcing that a deal had been “largely negotiated,” with the terms including the reopening of the Strait of Hormuz.
“Fundamentally, there is no change to the underlying picture, where 10-11 million barrels per day of crude oil continue to be shut-in for every day the Strait of Hormuz remains shut,” June Goh, a senior oil market analyst at Sparta in Singapore, told Al Jazeera.
“However, markets are expecting a gush of 100 million barrels of crude oil from the stranded ships to flow out once the deal is in place.”
Goh said markets are likely to remain on edge for some time after any deal is finalised.
“Sparta estimates still about three to six months required to get everything back to status quo, including time to bring production and refineries back online,” Goh said.
Iran has effectively blockaded the strait since the start of the war in late February, disrupting about one-fifth of the global oil trade.
The US has imposed its own blockade of Iranian ports since mid-April, further disrupting commercial shipping in the waterway.
In his Truth Social post on Sunday, Trump said the US blockade would remain “in full force and effect until an agreement is reached, certified, and signed”.
