HONG KONG, March 25 —Oil prices tumbled and stocks rose today after reports that Washington sent a peace plan to Iran, while Tehran announced it will let “non-hostile” oil vessels through the crucial Strait of Hormuz.

After nearly four weeks of conflict, investors jumped on the first signs that hostilities could wind down, though analysts pointed out that the arrival of more US troops in the Middle East suggested the chance of escalation remained.

The economic impact of the crisis has begun to bite around the world, with governments looking to cut energy consumption.

Both main crude contracts plunged more than six per cent — with Brent back below US$100 (RM400) — after US President Donald Trump voiced optimism at ending the war and said officials were “in negotiations right now”. However, both pared the losses as the day wore on.

Speaking to reporters in the Oval Office, Trump said Iran “did something yesterday that was amazing actually. They gave us a present and the present arrived today. And it was a very big present worth a tremendous amount of money.”

“That meant one thing to me — we’re dealing with the right people.”

He did not explain further but said it related to the Strait of Hormuz, through which a fifth of global oil and gas flows and which Iran has largely blockaded, sending global energy prices soaring and fuelling fears of another surge in inflation.

The New York Times quoted unnamed officials saying that Washington had sent a 15-point peace proposal via Pakistan.

Israel’s Channel 12 said that Trump was suggesting a one-month ceasefire during which they would discuss handing over Iran’s enriched uranium and banning further enrichment, while Tehran would also ensure safe passage through the Strait of Hormuz.

The Israeli report also said Iran would see an end to all sanctions and receive assistance in developing civil nuclear energy.

Economic impact 

Meanwhile, Tehran, in a message circulated by the International Maritime Organization, assured safe passage through the strait to “non-hostile vessels”.

Iran already said it was not targeting friendly nations.

Equity traders pounced on the developments, with Tokyo, Seoul, Shanghai, Hong Kong, Sydney, Singapore, Mumbai, Bangkok, Jakarta, Wellington and Taipei all well up.

An extra boost came from International Energy Agency boss Fatih Birol’s comments that he was “ready to move forward” with an additional release of oil reserves “if and when necessary”.

Pepperstone’s Chris Weston warned that “developments on the ground do not fully support a de-escalation narrative”.

“Reports that the 82nd Airborne Division could deploy around 3,000 troops to the Middle East, alongside discussions around raising the US enlistment age from 34 to 42, point to continued preparation and an increased presence in the region, which in Trump’s thinking could increase the pressure on Iran to forge an agreement in the reported upcoming talks.”

And the economic impact is becoming increasingly clear.

Vietnam raised the price of diesel today to 39,660 dong (US$1.50) per litre, meaning it had more than doubled since the war started.

Data Tuesday showed business activity in the eurozone slowed significantly in March as energy prices surged and global supply chains were hit, while France’s INSEE statistics agency trimmed its growth forecast for the first and second quarters of this year.

Philippine President Ferdinand Marcos declared a state of “national energy emergency”, citing risks to domestic supplies, and Sri Lanka ordered streetlights, neon signs and billboard lighting to be switched off.

Bangladesh raised jet fuel prices 79 per cent and Ireland slashed the excise duty on petrol and diesel to stem surging prices at filling stations. — AFP