Oil prices

It comes as hundreds of thousands of Brits leave the UK for a break

Jet2 has released an update regarding its half-term travel operations. This follows ongoing concerns about the potential impact of the US-Iran war and jet fuel supplies, though airlines including Jet2 and Ryanair have maintained there will be no immediate disruption.

In its statement released today (Wednesday, May 27), Jet2 revealed it had experienced its busiest weekend on record. It announced that it had seen an unprecedented number of passengers departing from airports across the UK for the May half-term break.

The most popular destinations during half-term included the Balearics, Canaries, Turkey, Mainland Spain, Portugal, Greece, Cyprus, Malta, Croatia and Bulgaria, as travellers capitalised on the key holiday period.

Jet2 is preparing for a hectic summer season and has an extensive programme available, with a fleet of 139 aircraft transporting passengers on their getaways from 14 UK airports to locations across Europe, the Mediterranean, Canary Islands and North Africa.

Steve Heapy, CEO of Jet2, said: “This weekend saw us operate a record-breaking weekend, as customers took advantage of the bank holiday weekend and May half-term and took off to the sunshine. Given the number of customers who travelled with us over the weekend, it is very clear how much people want to get away and enjoy their well-deserved holidays. With our famous Red Team looking after customers, holidaymakers can look forward to creating memories and be assured of a wonderful holiday.

“Everything is geared up and ready for a busy summer and our message to holidaymakers is that summer is very much on. We have always been very clear about our plans to operate as normal this summer, and the busy weekend shows just how eager customers are to get away.”

This follows the firm reassuring passengers that ‘summer is on‘ despite mounting concerns over jet fuel availability. The optimistic stance comes after the airline and tour operator received encouraging updates from fuel suppliers, who have confirmed increased production and extra imports of jet fuel.

It follows a report published just last week which saw Jet2 top a UK resilience ranking as the best protected UK airline against elevated fuel costs.

Ryanair boss Michael O’Leary echoed similar views on jet fuel, stating he had ‘no issues over jet fuel supply right now through to the end of September‘. However, he cautioned that he was ‘very concerned about the price of oil’ due to the ongoing disruption at the Strait of Hormuz.

This could result in ‘airlines failing all over Europe’, he warned. Ryanair, Europe’s largest airline by passenger numbers, announced on Monday that future profits would also likely take a hit.

To combat rising fuel prices, a UK holiday park is offering to reimburse guests through its newly launched ‘Fuel Cover’ scheme this summer

One of Britain’s largest holiday park operators is offering to reimburse fuel costs for guests travelling to their locations, as prices keep climbing. With oil prices at their highest level since 2022 because of tensions in the Middle East, petrol, diesel, and aviation fuel prices are being transferred to consumers.

As a results, Hoseasons is offering to refund the money spent getting to their sites this summer, through its recently introduced ‘Fuel Cover’. It comes after research revealed 15.4 million Brits (28%) have altered holiday plans this year because of increasing costs.

Nearly six in 10 of the 2,000 adults surveyed said the expense of going away, including travel, fuel, and spending while there, are deterring them from booking a trip this summer.

“UK breaks remain a hugely popular option for families looking for flexibility, value and quality time together, giving people the chance to properly switch off and reconnect closer to home,” Simon Altham, chief operating officer for the brand said.

“We know rising travel costs are becoming a bigger consideration for many holidaymakers this summer. Fuel, in particular, can quickly add to the overall cost of a trip, especially for families travelling during peak holiday periods.

“That’s why we wanted to help ease some of that pressure and support people continuing to take the UK breaks they were already planning this summer.”

The research, carried out on behalf of the brand, revealed that 7.6 million (27%) of those planning a UK holiday admitted they will cover shorter distances for a domestic getaway this year, with those driving expecting to spend an average of £68 on fuel.

Amongst those still intending to take a break, 26% have set a reduced overall budget for their trip, while 23% are seeking self-catering accommodation. Similarly, many stated they are actively hunting for cashback or money-saving deals prior to booking.

Two thirds believe holiday firms need to do more to encourage people to book trips in the current climate.

Hoseasons customers can claim back up to £75 in fuel costs through its new Fuel Cover initiative per booking between 20 May and 30 August for travel before 30 September. Bookings must be made by phone and quoting the code “FUEL75”.

Simon Altham from Hoseasons said: “Travel costs are one of the biggest considerations for holidaymakers at the moment. Fuel, in particular, can quickly become one of the biggest extra costs for families travelling during peak holiday periods.

“That’s why we’ve designed the offer to ease some of the pressure and help families make the most of their summer breaks.”

Current events are causing all sorts of problems, according to a currency exchange expert

Brits heading abroad this summer are being given a new warning.

Towards the close of last week, Sterling dropped to a three-week low against the Euro and a five-week low against the US Dollar, spelling trouble for Britons travelling overseas. The decline, according to a foreign exchange expert, stems from two key factors.

Tony Redondo, founder of Newquay-based Cosmos Currency Exchange, explained: “Firstly, markets are worried that Britain is heading towards a period of political instability. Secondly, they are worried about how the UK economy will cope with an expected rise in inflation.

“Though inflation fell to 2.8% today, it is expected to rise, potentially sharply, in the months ahead as the impact of rising oil prices due to the conflict in the Middle East hits the UK economy in full. If markets believe higher inflation makes UK gilts a not–so-safe bet, that will apply further downward pressure on Sterling.”

Tony noted the weakened Pound was hammering holidaymakers venturing abroad, as their money was now “plummeting” in value against currencies like the Euro and Dollar – a situation that “could get worse in the weeks and months ahead”.

However, he highlighted that a struggling domestic economy and Sterling’s persistent fragility was prompting an increasing number of businesses to fundamentally reconsider how and where they sell their services.

Tony added: “If they’re anything, the UK’s businesses are resilient and proving they can adapt. During 2026 to date, we’ve seen a sharp rise in UK businesses moving away from difficult domestic conditions and looking for customers overseas.

“Rather than having all their eggs in one UK economic basket, a growing percentage of UK firms are now marketing and selling their products and services online to customers in Europe, America, Canada, Australia and even Singapore and Hong Kong.

“If there’s one silver lining to the weak UK economy, it’s that many traditionally domestic UK small businesses have become international ones, as they cast their nets ever wider in search of customers and profit.

“The ability to ply your trade internationally has never been easier and it can massively boost a company’s bottom line.”

Industry leaders have not ruled out fuel shortages this summer

Airlines will not be able to continue “absorbing the cost” of disruption caused by the closure of the Strait of Hormuz in the long term, according to the director general of the International Air Transport Association. Willie Walsh told the BBC there was no need to panic over potential jet fuel shortages, but warned rising fuel prices would inevitably feed through into higher ticket prices.

He said: “There’s just no way airlines can absorb the additional costs they’re experiencing. There may be some instances where airlines will discount to stimulate some traffic flow… but over time it’s inevitable that the high price of oil will be reflected in higher ticket prices.”

While Mr Walsh did not think there would be widespread cancellations, he added: “I think the concern will be that if sufficient alternative supply isn’t sourced, there may be some shortages when we get into the peak summer period.”

Last week, British Airways’ parent company IAG warned its profits will be hit as it expects to spend about two billion euro (£1.72 billion) more than planned on fuel this year. Chief executive Luis Gallego said IAG does not believe there will be “any interruption for the summer” in terms of jet fuel supplies.

Earlier this month, Transport Secretary Heidi Alexander said summer holiday plans will not face major disruption because of shortages. She revealed that more fuel has been imported from America, and UK refineries have upped their production.

The Government has also introduced a temporary rule change allowing airlines to group passengers from different flights together onto fewer planes to save fuel. It comes amid data that showed airlines have increased the number of flight cancellations for May.

Aviation analytics company Cirium said that as of Tuesday, airlines have axed 296 departures from UK airports this month, equivalent to 0.75% of the total. That is up from 120 cancellations six days ago.

Figures for the peak summer months show week-on-week schedule reductions are currently limited. The number of outbound flights planned for June is 48 lower than a week ago, after 0.2% of flights were cancelled.

For July the week-on-week reduction is 31, while the figure for August is just four. Airlines avoid being liable for compensation if they axe a flight with at least two weeks’ notice, meaning they can delay decisions on summer cancellations and still avoid payouts.

The price of jet fuel has more than doubled since the start of the war in the Middle East, as Iran continues to have a stranglehold on tankers passing through the Strait of Hormuz. A Government spokesperson said: “UK airlines are clear that they are not currently seeing a shortage of jet fuel.

“Aviation fuel is typically bought in advance and airports and suppliers keep stocks of bunkered fuel to support their resilience. We continue to work with fuel suppliers, airports, airlines and international counterparts to keep flights operating.

“We are also consulting on measures to help airlines plan realistic flight schedules which will avoid last-minute disruption and protect holidays.”

Published on 11/05/2026 – 7:59 GMT+2•Updated
8:11

Oil prices surged in early trade as investors digested the latest developments in the Middle East, with both Brent and US crude climbing over 4%.

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It comes after Trump’s rejection of Tehran’s response to the latest US proposition on bringing the conflict in Iran, and subsequent impact on trade passing through the Strait of Hormuz, to an end.

In other trading, US futures edged lower, while Tokyo’s Nikkei 225 fell 0.4% to 62,486.84 after briefly reaching another record high in intraday trading at above 63,300.

South Korea’s Kospi gained 4.1% to 7,804.71. It also hit an all-time intraday high, led by gains from tech-related stocks including Samsung Electronics and memory chip maker SK Hynix.

Technology-related stocks and growing artificial intelligence-related interest have supported markets in Japan and South Korea despite the Iran war, with the Nikkei 225 and Kospi rising more than 10% and 30%, respectively, over the past month.

Meanwhile, Donald Trump will head to China this week for talks with his counterpart, Xi Jinping. The two leaders are expected to discuss a wide range of topics, including trade concerns.

The Department for Transport has also given its latest advice

People from the UK heading abroad for the Spring Bank Holiday are being given the latest advice on holidays amid growing fears over jet fuel shortages and flight disruption. Travel experts say flights are continuing to operate “as planned” despite airlines across Europe drawing up contingency measures following soaring fuel prices linked to conflict in the Middle East.

Concerns have grown after reports that some airlines are preparing for possible refuelling stops on long-haul routes if shortages worsen. German airline Lufthansa has reportedly already begun contingency planning after one of its flights was forced to divert for fuel during a recent journey to South Africa.

The airline has also cut thousands of flights from its wider summer schedule as fuel costs continue to rise. However, travel industry figures insist UK holidaymakers should not panic.

Mark Tanzer, Chief Executive of ABTA – The Travel Association, said: “We really don’t want people worrying about their holidays; planes are taking off daily and people are continuing to get away on their holidays. The Government and airlines are clear that there isn’t a problem with fuel supply.

“If you have a holiday booked in for the coming months – including the May half term – we expect it to go ahead as planned.”

He added: “Whilst there have been reports about cancellations globally, these amount to less than one per cent of overall flights.”

According to aviation analytics firm Cirium, around 13,000 flights worldwide have reportedly been cut during May. Munich and Istanbul are believed to be among the worst-affected destinations.

The Department for Transport has also said there is currently “no need” for travellers to change their plans. Officials say UK airlines buy fuel in advance and airports continue to maintain reserves to help prevent disruption.

Passengers are still being advised to check flight updates with airlines before travelling and ensure they have suitable travel insurance in place. Some 120 flights from the UK this month have been cancelled, new figures show, as jet fuel prices surge and fears of shortages grow.

Cirium said airlines have axed 120 of the 22,613 departures initially scheduled from UK airports in May, equivalent to 0.53%. The number of outbound flights planned for June is 36 lower than a week ago. This represents a 0.2% reduction and means capacity for the month has fallen by 7,972 seats.

The final week of May is a peak period for holidays as it is half-time at many schools. For all flights globally, some 13,005 planned for May were cancelled between April 10 and April 21, equivalent to 1.5%. That reduced capacity by almost two million seats.

Julia Lo Bue-Said, chief executive of Advantage Travel Partnership, a network of independent travel agents, said airlines are “assessing poor performance flights and consolidating or cancelling as required”.

She added that UK departures to popular summer hotspots “remain unaffected” and insisted “customers can continue to book with confidence”. Paul Charles, founder of travel consultancy The PC Agency, said: “Airlines are now being forced to cut flights and make difficult decisions ahead of the peak season.

“It is better for them to cancel flights well in advance so that passengers are less inconvenienced than a last-minute change of plan. As the Iran conflict continues, there will need to be many more cancellations as the jet fuel supply is squeezed.”

Lufthansa’s airline group announced in April it would cancel 20,000 flights over the following six months to save fuel. Iran continues to have a stranglehold on tankers passing through the Strait of Hormuz, leading to a surge in oil prices and concerns of jet fuel shortages.

But on Sunday, Transport Secretary Heidi Alexander said summer holiday plans will not face major disruption because of the latter. She revealed that more fuel has been imported from America, while refineries have upped their production.

The Government has also introduced a temporary rule change allowing airlines to group passengers from different flights together on to fewer planes to save fuel.

Soaring jet fuel prices and the threat to supplies – amid the Middle East war – has left millions of Brits worrying about whether their summer holiday plans will be disrupted

May could mark the peak in flights being axed due to the Iran war, an expert has declared.

Families were urged not to panic about their summer getaway, despite fears over jet fuel shortages. Data shows airlines have cut 13,000 flights globally this month due to the conflict in the Middle East. In total, nearly two million seats have been removed from flights scheduled for May.

The reductions come ahead of the half-term holidays at the end of the month. Many people have been left worrying what will happen to holiday flights already booked over the peak months ahead.

Aviation analyst John Strickland insisted the 13,000 flights pulled this month amount to about 1% or 2% of all those scheduled. And he warned against assuming the same number – or more – would be impacted in the coming months.

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“You can’t judge May against the peak summer,” Mr Strickland told the Mirror. “Airlines want to fly their full programme – this is not a wholesale chopping of flights that would disrupt people’s summer holiday plans.”

Mr Strickland said airlines were “relatively confident” they will have enough jet fuel available on a rolling six-week basis, with signs that additional supplies are being sourced from the US and elsewhere to replace those lost from the Gulf.

Some carriers have switched to smaller aircraft or more fuel efficient planes to brace themselves for possible disruption, according to aviation analytics firm Cirium. It says 120 scheduled flights from the UK to global destinations have so far been cancelled in May. While it is still early days, the number of cancellations in June stands at 36, out of just under 22,000 scheduled flights.

It comes after the price of jet fuel doubled in the wake of the US-Israel war with Iran which erupted at the end of February. The conflict has crippled shipments through the key Strait of Hormuz.

German airline Lufthansa has axed 20,000 flights, and warned higher jet fuel prices could cost it £1.5billion this year. It joined around two dozen airlines that have now scaled back operations.

Ryanair boss Michael O’Leary said at the start of April his airline may be forced to cancel 10% of its flights this summer. He told ITV News: “We’re all facing an unknown scenario. And we are certainly looking at maybe having to cancel 5% to 10% of flights through May, June and July.”

British Airways owner IAG is due to issue updated results on Friday.

Transport Secretary Heidi Alexander said she was confident most people travelling this summer would have a similar experience to last year. She said there was currently no disruption to the supply of jet fuel, but “this clearly is an evolving situation”.

Oil prices slumped to two-week lows on Wednesday amid reports that the US and Iran were nearing an initial peace deal. Brent crude fell 7% to $102 a barrel – down a recent peak of more than $120 but still well above the $60 before the war started.

Rory Boland, editor of Which? Travel, said: “It is understandable that holidaymakers are feeling apprehensive about their summer travel plans due to the wave of cancellations.

“The percentage of flights cancelled from the UK remains small, when you consider that the worst airlines cancel over 2% of flights less than a day before departure, even in normal times.

“Our advice for this summer is to book a package holiday, as that is the best way to protect the full cost of your holiday should greater disruption occur.”

Mark Tanzer, chief executive of travel trade body ABTA, said: “We really don’t want people worrying about their holidays; planes are taking off daily and people are continuing to get away on their holidays.

“The Government and airlines are clear that there isn’t a problem with fuel supply. If you have a holiday booked in for the coming months – including the May half term – we expect it to go ahead as planned.

“Whilst there have been reports about cancellations globally, these amount to less than one percent of overall flights.”

Published on
04/05/2026 – 7:15 GMT+2

Crude prices were slightly lower ahead of European markets opening as traders digested comments from US President Donald Trump that Washington would help ships leave the Strait of Hormuz from today. Iran, however, has rejected the plan.

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At the time of writing, the price of a barrel of US benchmark crude (WTI) was down 0.28% to $101.65 a barrel, while Brent crude, the international standard, edged down 0.06% to $108.10 a barrel.

Much hinges now on progress towards ending the war with Iran and unlocking the bottleneck through the Strait of Hormuz.

The oil market “remains the fulcrum, with hundreds of tankers, bulk carriers, and cargo ships still stranded across the Gulf, idling as storage constraints force producers to shut … production simply because there is nowhere left to store it,” Stephen Innes of SPI Asset Management said in a commentary note.

Trump said what he called “Project Freedom” would begin Monday morning in the Middle East. The US Central Command said it would involve guided-missile destroyers, more than 100 aircraft and 15,000 service members, but the Pentagon did not immediately answer questions about how they would be deployed.

Asia-Pacific and US markets

In Asian share trading overnight, Hong Kong’s Hang Seng jumped 1.4% to 26,135.47. Markets in mainland China and Japan were closed for “Golden Week” holidays. In Australia, the S&P/ASX 200 slipped 0.3% to 8,704.70.

Strong buying of tech stocks pushed shares in South Korea sharply higher, as the Kospi gained 3.8%. Taiwan’s Taiex surged 4.2%.

On Friday, the S&P 500 climbed 0.3% to another all-time high of 7,230.12, closing out a fifth straight winning week. The Dow Jones Industrial Average dipped 0.3% to 49,499.27, and the Nasdaq composite added 0.9% to a record close of 25,114.44.

Apple led the way after delivering better profit than expected. Because it’s one of Wall Street’s biggest stocks in terms of overall size, its rally of 3.3% was by far the strongest force lifting the S&P 500.

Stock prices generally follow the path of corporate profits over the long term, and US companies have been exceeding expectations for earnings in the first three months of 2026. That’s even with the war with Iran and high oil prices souring confidence for many US households.

Strong earnings boost S&P 500

A little more than a quarter of the companies in the S&P 500 have reported already, and 84% of them have topped analysts’ estimates, according to FactSet. The index is on track to deliver roughly 15% growth in profit from a year earlier.

The main uncertainty for the global economy is where oil prices are heading because of the Iran war. Oil prices moved higher last week on worries that the war might keep the Strait of Hormuz closed for a long time, trapping oil tankers pent up in the Persian Gulf instead of delivering crude to customers worldwide.

Brent was selling for a little more than $70 per barrel before the war began, and soaring prices helped the two biggest U.S. oil companies report stronger profit for the latest quarter than analysts expected. But stock prices nevertheless fell for both Exxon Mobil, 1%, and Chevron, 1.4%, as oil prices regressed Friday and each reported drops in net income from a year earlier.

In other dealings early Monday, the dollar rose to 157.18 Japanese yen from 156.80 yen. The euro fell to $1.1724 from $1.1746.

DIY expert Nick Knowles said he’s no longer going to Turkey as BBC Morning Live viewers told ‘it could see holidays in jeopardy’

A BBC travel expert has given an update to anyone with holidays booked or considering going on a foreign break this summer. On BBC Morning Live consumer champion Rebecca Wilcox told hosts Rav Wilding and Holly Hamilton how concern is growing from people with breaks lined up – as to if it could be cancelled, will they be charged more supplementary fees and will they be covered.

And during the section show DIY expert and guest Nick Knowles revealed his family has decided to cancel their holiday to Turkey amidst all the uncertainty. Host Helen said: “With this morning’s headlines showing oil prices at their highest level since 2022 there’s growing concern that airlines could respond by raising fares or even cancelling some flights.”

Ms Wilcox agreed and said: “It’s very worrying and and the number of headlines make us spike in our concern and I can see that the fuel price is going up making concerns go up and what we’re going to talk about today is how specifically that is going to affect the holiday pricing with airline fares because, of course, jet fuel, is integral for flying through the air.

“Jet2 has told us they are seeing an increase in holidaymakers leaving it to the very last minute to book their holidays, and that’s so they know the full cost of their trip at the time of purchase and that is due to the conflict in the Middle East.

“It tells us that there’s a real worry going on out there. People are quite hesitant to book, they don’t know whether they should go ahead with it. On Monday we heard the Prime Minister saying that airlines actually do have enough jet fuel at the moment but it could see holidays in jeopardy in the future and that depends upon how long this conflict goes on for which, of course, nobody knows.”

She said more people are considering whether to go ahead or just book a staycation in the UK instead. Presenter Holly Hamilton said: “Most people when you chat to them, it’s at the forefront of their mind about booking holidays and in some cases they are cancelling them. Nick you and I were chatting about it and you’ve cancelled your holiday.”

Nick Knowles said: “Yes a holiday in Turkey and we’ve decided to stay home. A holiday in the UK is more expensive than going abroad – so we’re going to go in the back garden and drink cocktails and sunbathe in the back garden. The trick is don’t tell anyone you’re not going away because then they’ll ring you and interrupt.”

Holly said, “Bad news, you’ve just told everybody.” Nick added, “I’m going to be in such trouble with my wife now.”

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Rav asked: “Can holiday companies just raise prices then?” Rebecca said: “I’m devastated that Nick is not going to Turkey – how is he going to get those new teeth he was talking about earlier? I’m joking, obviously his teeth are beautiful.” Nick interjected: “I’m going back to the same people who did my hair it’s fine.”

When can holiday companies raise prices

Rebecca said: “They can only raise their prices in specific circumstances because there is a law protecting consumers from these huge hikes in prices that they could add on for any random charges. This law is known as the Package Travel Regulation and it means we are protected.

“The surcharges they are allowed to add on are related to things like fuel cost increases, which we’re talking about today, transport taxes and fees and any fluctuations in the exchange rate movement. They have to say this in your T&Cs at time of booking so just c heck your terms and conditions.”

Holly said: “The people who have booked their holiday will be thinking ‘how much could they possibly add on?’ “ Ms Wilcox said: “Well, it is a limited amount they can add on before they give you the option of cancelling or a refund and that amount they can add on is 8 per cent. This 8 per cent is broken down into 2 sections because the holiday company has to swallow that first 2 per cent and then you as consumer will only pay 6 per cent and that’s of the total cost of your holiday package.

READ MORE: TV holiday expert Simon Calder gives holiday 2026 update and says ‘that is crazy’

“What does that look like for a holiday? So for instance if you’ve spent £1,000 on your holiday that’ll be an extra £60. A £3,500 holiday, another £210, and a £5,000 cruise that’s £300. They can only ask for this for up to 20 days before you travel and that’s why people are booking these last minute holidays because the time limit for that 6 per cent has already gone.”

Package holidays

Rav gave an example from a viewer, Jeff, who was due to pay the balance on his holiday – he’d booked the flights and the accommodation through the same agent and asked if his family would be able to get a full refund if they have to cancel our holiday because of the shortage. Ms Wilcox said: “This sounds like he’s booked a package holiday when he’s booked the flight and the accommodation together and that means you do have more protection and you should be offered a full refund and a suitable alternative if they make major changes.

“If it’s a flight only deal they must offer you a replacement flight or a refund. If they offer you a holiday voucher or credit with them instead of cash be really wary and think twice about doing it. They may lure you in by offering you something that’s supposedly more than what you spent so it looks like it’s of greater value, but I would say you’re more protected if you get the cash back.” She said there may be restrictions, there may be an end date on the credit and also the company could go bust.

She said getting travel insurance when you make the booking was vital as you’re protected from then until time of travel.

Published on 30/04/2026 – 10:17 GMT+2•Updated
10:28

Brent crude, the international standard for oil prices, jumped by over 7% during early trading on Thursday, touching $126 per barrel, the highest intraday level since 2022 when Russia initiated the full-scale invasion of Ukraine.

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The US benchmark crude, WTI, also rose more than 3% and hit over $110 per barrel.

At the time of writing, prices have corrected slightly with the front month contract for Brent trading at around $122 per barrel and WTI at roughly $108.5.

Prices are now the highest they have been since the start of the Iran war.

The surge in oil prices is a direct consequence of stalled negotiations over the reopening of the Strait of Hormuz, the absence of a clear path toward ending the war and a seemingly increased chance of US-Israeli military action returning.

US President Donald Trump is set to meet with the head of the US Central Command, Admiral Brad Cooper, on Thursday and receive a briefing on new military options for action in Iran, according to Axios which cites two unnamed people.

The meeting signals the potential for fresh escalation in the Middle East as the resumption of combat operations is reportedly “seriously under consideration” and oil markets have reacted swiftly to the news.

A ceasefire has held since early April but recent negotiating efforts have fallen flat with the two sides refusing to meet. Meanwhile, the US and Iran both maintain their blockade of the vital Strait of Hormuz.

US Central Command has also reportedly asked for hypersonic missiles to be sent to the Middle East, which would mark the first time the US army has deployed that type of weapon.

The persistent blockade of ports and the threat of expanded combat have fundamentally reshaped market expectations.

A shifting landscape for OPEC and global supply

The spike in prices is occurring against a backdrop of significant structural change within the global oil hierarchy.

Earlier this week, the United Arab Emirates officially withdrew from the Organisation of the Petroleum Exporting Countries (OPEC) and its wider alliance (OPEC+), a move the nation claimed was necessary to prioritise its own national interests.

Under normal market conditions, the exit of a major producer from the cartel might be expected to signal a potential increase in supply or a decrease in price stability.

However, the sheer scale of the Iran war has rendered the UAE’s departure secondary in the minds of traders.

Despite the UAE’s exit, which was expected to potentially weaken OPEC’s grip on production quotas, prices have continued their upward trajectory.

This suggests that the “war premium” currently dominates all other market fundamentals.

Investors are currently less concerned with the internal politics of oil-producing nations and more focused on the immediate physical absence of Iranian crude, suspended shipping routes through the Strait of Hormuz and the threat to regional infrastructure.

However, the transition of the UAE to an independent actor still highlights a growing fragmentation in global energy governance at a time when the world’s energy security is at its most vulnerable.

Oil markets face renewed instability following the United Arab Emirates’ formal exit from the Organisation of the Petroleum Exporting Countries (OPEC) and its wider alliance (OPEC+), announced on Tuesday and taking effect on Friday.

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The move, which ends decades of membership, comes as the global economy continues to reel from the ongoing war with Iran and the blockade of the Strait of Hormuz remains in place.

Investors are currently weighing the potential for higher future output from the UAE against the immediate and acute risks posed to global supply routes, as well as the increased chances that more countries drop out of OPEC and OPEC+.

Following the announcement, markets reacted swiftly as the potential for oversupply from the UAE was priced in. Oil prices fell by between 2% and 3%, particularly in futures contracts a couple of months ahead.

However, the move was just as quickly offset by the risk premium associated with the Middle East conflict and the current halt to US-Iran negotiations.

At the time of writing, US benchmark crude, WTI, is trading above $105 a barrel, while Brent crude, the international standard, is over $112. Both prices are around 4% higher on Wednesday from the UAE announcement low.

The UAE’s decision follows years of simmering tension between Abu Dhabi and Riyadh over production quotas. The UAE has invested over $150 billion (€128bn) in the state-owned Abu Dhabi National Oil Company (ADNOC) to expand its capacity to five million barrels per day.

However, under OPEC’s restrictive framework, much of this capacity remained underutilised, now prompting the government to prioritise its national interest.

The departure of the group’s third-largest producer is a significant blow to the cohesion of the 60-year-old organisation. Maurizio Carulli, global energy analyst at Quilter Cheviot, noted the limitations this exit places on the remaining members.

“Until tanker traffic through the Strait of Hormuz is safe again, OPEC’s ability to stabilise prices is sharply constrained, while US producers have gained outsized influence,” Carulli explained.

While the UAE has pledged to bring additional production to the market in a “gradual and measured” manner, the sudden lack of coordination within OPEC has introduced a new layer of uncertainty.

For the UAE, the blockade served as a final catalyst for its exit. With its primary export route under threat, Abu Dhabi has sought the diplomatic flexibility to forge independent security and trade partnerships outside the traditional cartel structure.

Despite the geopolitical turmoil, energy equities have remained resilient.

According to Carulli, “integrated majors such as BP, Shell, TotalEnergies, ENI, Chevron and ExxonMobil are benefitting from a price uplift that could add 5-10% to operating cash flow for every $10 increase in oil prices.”

Standoff over the Strait of Hormuz

In a separate but related development, the security situation in the Middle East remains precarious despite a fragile ceasefire. Iran has recently offered a ten-point proposal to reopen the Strait of Hormuz.

In exchange for restoring maritime traffic, Tehran is demanding a full withdrawal of the US naval blockade and an end to the current hostilities.

US President Donald Trump, who recently extended the two-week ceasefire mediated by Pakistan, described the latest Iranian offer as “much better” than previous iterations but still did not accept the terms.

Shortly after, Trump posted on social media claiming that Iran is in a dire and desperate condition with no leverage to negotiate.

Washington continues to insist on a permanent settlement regarding Iran’s nuclear programme and an “unconditional” reopening of the waterway before sanctions are lifted.

The impact of this blockade on global energy security cannot be overstated.

“The prolonged closure of the Strait of Hormuz has removed roughly 12% of global oil supply from the market, according to the IEA, a bigger disruption than the Yom Kippur war, the Iran‑Iraq conflict, the invasion of Kuwait or even the fallout from Ukraine,” Carulli highlighted.

Holidaymakers planning a trip to Spain who haven’t yet booked their flights are being warned to do so know amid speculation that escalating oil prices could soon drive up the costs

A Spanish tourist boss has warned that Brits who haven’t yet booked their summer holidays should book flights as soon as possible to avoid “price fluctuations”.

Jordi Hereu, Spain’s Industry and Tourism Minister, made the comments to Spanish news outlet Expansion yesterday (April 27), warning that growth in the tourist industry could be dampened by rises in the cost of flights. Last year, Spain welcomed 97 million tourists through its borders, and was expected to hit the 100 million mark this year.

He said: “What ⁠we’re recommending is that ‌people buy their tickets now because it’s true that (airlines) are currently using kerosene that was purchased some time ‌ago, and therefore there’s an element of ‌price fluctuations involved.”

“It’s already clear that prices have risen and this could affect demand.” he added. He went on to reassure holidaymakers that authorities were looking at ways to prevent fuel shortages as the busy summer season looms.

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But Mr Hereu also warned: “If the countries ‌that send tourists to Spain had problems, we would have them too.”

Many airlines have been foreced to cancel flights this spring and summer due to the rising cost of jet fuel as supplies run law, as a consequence of the closure of the Strait of Hormuz following the Israeli and US attack on Iran.

Keir Starmer said the UK was doing “everything we can” to reopen the Strait, although the UK PM warned: “I don’t want anybody to think that, once the Strait is open, that that’s the end of the damage. It will go on longer than that.”

He went on to tell Sky News: “I can see that, if there’s more impact, people might change their habits… where they go on holiday this year, what they’re buying in the supermarket, that sort of thing.”

Corneel Koster, Virgin Atlantic’s chief executive, told the Telegraph: “I was looking at improving our financial results by a really significant chunk. And then this happens. We have never seen jet fuel at these levels, with prices more than doubling. The industry cannot absorb increases like this.”

In recent weeks, the cost of a barrel of jet fuel has increased from £63 to as high as £148 amid the conflict in the Middle East. The cost of fuel accounts for around a quarter or more of operating expenses for airlines, meaning it can have a big impact on profits.

According to reports by the BBC, the lowest-priced economy tickets currently cost 24% more on average than this time last year. In response, airlines have asked for measures such as a cut or suspension to Air Passenger Duty to be put in place to balance out the costs for consumers.

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A number of airlines have already cut services, such as Lufthansa, which has axed 20,000 European short-haul flights, which it claims will save around 40,000 metric tons of jet fuel. The German airline will offer customers options, including refunding fares or booking them on alternative flights with other airlines.

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The low-cost airline is cancelling flights in May and June due to soaring aviation fuel prices linked to the ongoing conflict in the Middle East

An airline that operates routes to and from the UK is axing flights in May and June because of surging fuel costs. Transavia, the budget airline owned by the Air France-KLM group, is scrapping scheduled services for May and June to cut expenses as aviation fuel prices soar due to the Middle East conflict.

The Air France-KLM group’s low-cost arm will change its timetable for May and June to streamline costs amid rocketing fuel prices linked to the Middle East war, a spokesperson confirmed to AFP. The airline operates from London Stansted to Rotterdam several times a week, and is used by tourists who fly to Schiphol airport in the Netherlands before going on to other European destinations with Transavia.

“Due to the current geopolitical situation in the Middle East and its impact on aviation fuel prices, Transavia France is adapting its flight schedule and is forced to cancel several flights scheduled for May and June 2026,” the carrier, which runs medium-distance routes, stated.

The cancellations represent “less than 2% of the flight schedule for the May-June period,” a spokesperson informed AFP. Transavia said “customers affected by a cancellation are notified individually by SMS and email.” Details of which routes are affected have not been disclosed so far.

They can then “benefit, according to their choice, from a free rescheduling, a voucher, or a full refund of their ticket.” Additionally, “for the majority of cancelled flights, a rescheduling solution within 24 hours is offered,” the airline states.

Europe normally gets half of its fuel from Gulf nations. However, since the start of the war between the United States and Iran in late February, the Strait of Hormuz has been shut down by Tehran.

In Brussels, European Commissioner Dan Jorgensen warned that the EU was “approaching very rapidly” a potential supply crisis, raising concerns about a summer characterised by “higher airfares and cancellations.” Airlines including Transavia have already begun raising ticket prices, with increases averaging approximately 10 euros per return journey, according to the carrier’s spokesperson speaking to AFP.

Chief Secretary to the Prime Minister Darren Jones warned on Sunday that the ongoing conflict is likely to push up costs for energy, food and flight tickets in the coming months, with potential disruptions to energy supplies affecting production rather than causing empty supermarket shelves.

“You’re going to see prices go up a bit as a consequence of what Donald Trump has done in the Middle East,” he told the BBC’s Sunday With Laura Kuenssberg programme. “That’s probably going to come online not just in the next few weeks, but the next few months. There’s going to be a long tail from this.”

When pressed on how long elevated prices could last, he indicated it would be roughly eight months after the Strait of Hormuz is reopened and tensions in the region begin to ease. “I think our best guess is eight-plus months from the point of resolution that you’ll see economic impacts coming through the system,” the minister said.

Last week, German airline Lufthansa said it would cut 20,000 European short-haul flights over the summer. It blamed the price of jet fuel.

An industry expert told travel journalist Simon Calder on his podcast last week that he expected more flights to be cut by airlines. Ted Wake, managing director of Kirker Holidays, said: “I think Lufthansa has got a very comprehensive schedule. Twenty thousand flights isn’t a drop in the ocean but it’s a relatively small number if you look at the overall picture.

“I think other airlines within the UK market will be doing something similar.”

Passengers have been advised to check with their airlines before they travel

The Government has said it is “closely monitoring” UK jet fuel stocks as airlines prepare for a potential shortage. UK airlines have insisted they are “not currently seeing a shortage of jet fuel” as they buy it in advance and airports maintain stocks, the Department for Transport (DfT) said in an update published on Friday evening.

But airports will also make it easier for airlines to cancel flights without running the risk of losing their allocated “slots” – scheduled times for take-off or landing which some UK airports assign to airlines – if fuel shortages prevent them from flying.

Passengers have been advised to check with their airlines before they travel – and ensure they have appropriate travel insurance, according to the DfT.

This comes as oil prices continue to soar on the back of the US-Israel war on Iran and the closure of the Strait of Hormuz.

“There is no current need to change upcoming travel plans,” the DfT statement said.

“Since the closure of the Strait of Hormuz, we have been closely monitoring UK jet fuel stocks and working with airlines, airports and fuel suppliers to ensure passengers keep moving and businesses are supported.

“Government regularly meets with industry to monitor risks, understand pressures and ensure clear communication with passengers, should circumstances change.”

It added: “We recognise that families may be concerned, and that aviation and tourism businesses are operating in challenging global conditions.

“We are working hand in hand with industry to help flights keep operating.”

The DfT said airlines will also no longer be required to follow the “use it or lose it” rule at UK airports, whereby airlines must use at least 80% of their allocated slots during a season to keep them for the following year.

“Airport Coordination Limited, the independent body that manages slot allocation at UK airports, has updated its guidance so that airlines will not lose their slots if fuel shortages prevent them from flying,” the DfT update said.

“Airlines can now apply for an exemption from the ‘use it or lose it’ rule in these circumstances.” A spokesperson for Jet2 said its flight schedule remains unaffected for the foreseeable future.

“We remain in continual dialogue with our fuel suppliers, as is standard practice,” the spokesperson said. “Based on the conversations we have been having, we see no reason not to look forward to operating our scheduled programme of flights and holidays as normal.”

The airline also confirmed there will be no surcharge on any booked flights or holidays to cover cost increases, including those linked to jet fuel.

“Amidst speculation that some airlines and travel companies may introduce such surcharges, which would mean their customers facing additional costs after making a booking, Jet2 has removed the surcharge provision across all flights and holidays, even though the company has never previously applied them,” the airline announced on Friday.

Steve Heapy, CEO of Jet2, said: “Holidaymakers should have every right to book their hard-earned break in the sun, without worrying about being hit with additional costs, and they can have that complete assurance when they book a flight or holiday with Jet2.

“As a result of today’s announcement, customers booking with Jet2 know that they are locking in their price without additional cost surprises later and we strongly believe that is the right thing to do by them.”

It is understood that Virgin Atlantic and easyJet are also expecting to operate as normal.

The comment from the owner of BA comes after Jet2 said it would not introduce surcharges on any booked flights or holidays to cover cost increases

The parent company of British Airways has cautioned that airfares are set to climb as the closure of the Strait of Hormuz, triggered by the Iran conflict, has caused oil prices to surge dramatically.

International Airlines Group (IAG) announced on Friday that the ongoing Middle East crisis will push up the cost of flights to account for soaring jet fuel prices.

Airlines routinely purchase a portion of their fuel in advance at fixed rates to shield themselves from price fluctuations, a strategy commonly referred to as “hedging”.

Despite this, IAG warned that it remained “not immune” to the wider consequences of the Middle East conflict. The group insisted it had yet to experience any disruption to its jet fuel supply, amid growing concerns over potential future shortages as a result of the ongoing hostilities.

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The government is “closely monitoring” fuel stocks as airlines brace themselves for possible shortages, with oil tankers still unable to navigate the Strait of Hormuz. It has also emerged that airports are set to make it simpler for airlines to cancel flights without jeopardising their allocated take-off and landing slots, should fuel shortages prevent them from operating. The Department for Transport (DfT) announced that airlines will no longer be obliged to adhere to the “use it or lose it” rule at UK airports, whereby carriers must utilise at least 80% of their allocated slots during a season in order to retain them for the following year. “Airport Coordination Limited, the independent body that manages slot allocation at UK airports, has updated its guidance so that airlines will not lose their slots if fuel shortages prevent them from flying,” the DfT statement confirmed.

“Airlines can now apply for an exemption from the ‘use it or lose it’ rule in these circumstances.”

Meanwhile, Jet2 has revealed it will not be imposing surcharges on any previously booked flights or holidays to offset rising costs, reassuring customers that the price they book is the price they will pay.

The policy covers all flights and holidays booked through any channel, whether online, via the mobile app, contact centre or through an independent travel agent. Steve Heapy, CEO of Jet2 said: “Holidaymakers should have every right to book their hard-earned break in the sun, without worrying about being hit with additional costs, and they can have that complete assurance when they book a flight or holiday with Jet2. As a result of today’s announcement, customers booking with Jet2 know that they are locking in their price without additional cost surprises later and we strongly believe that is the right thing to do by them. Ahead of a busy summer this is yet more evidence of why, on top of our incredible holidays and award-winning customer service, nothing beats a Jet2holiday.”

Just because you have booked your break, doesn’t mean that is the price you will pay

Travel industry chiefs have warned that holiday prices could go up – even for people who have already booked. There are fears of cancellations, delays and disruptions this summer as oil supplies are restricted by the war in Iran.

And there are concerns that prices of travel will go up to cover the rising cost of fuel. But industry experts have also raised the spectre of the price of existing holiday bookings going up.

That means people who have already booked and paid for their holidays being asked to pay more if they still want to travel. Emma Brennan from travel agent and tour operator trade association ABTA said the legislation allows companies to ask for more money.

Speaking to BBC Money Box Live, she said: “There is something in the package travel regulations which just applies to package holidays, that travel companies could increase the cost of package holidays by what they call a fare charge. However, it very rarely happens, and there have been so many situations of disruption and uncertainty in recent years, and we haven’t seen this happening.

“And even if the travel company did choose to do it, there are quite strict rules around it. So, for example, it would have to have been in their terms and conditions, they can only do it up to the cost of eight per cent after that, and that’s a cost of eight per cent of the whole holiday – after that you would be offered a refund and it can only apply to various cost increases they are facing.”

According to Which? A 14-night package holiday can cost between £1,500 and £2,000 per person – meaning you could be asked to pay an extra £160 – or £640 for a family of four.

Airports Council International, which represents more than 600 airports, wrote recently to European commissioners for energy and transport and tourism, claiming that if the crucial Strait of Hormuz in Iran does not reopen in a “significant and stable way within the next three weeks” then “systemic jet fuel shortage is set to become a reality for the EU”.

Some airlines such as Virgin Atlantic have imposed fuel surcharges on passengers in response to higher oil prices, and others such as KLM have cancelled flights amid concerns about a shortage of fuel.

Susannah Streeter, chief investment strategist at Wealth Club, said: “Consumers are bracing for an energy crunch, and there are fears that just like the credit crunch of 2007-2008, there could be a long tail of repercussions. In the immediate term, there’s the prospect of holiday plans being ruined by a jet fuel crisis which could see thousands of flights cancelled.

“Lufthansa has already scrapped a big chunk of routes, and there are worries tourist destinations could be hit.”

Published on 21/04/2026 – 12:14 GMT+2•Updated
12:16

Oil prices edged slightly higher, European indices traded flat, while Asian markets surged on Tuesday morning as investors monitored potential US-Iran negotiations and the final 48 hours of the current ceasefire.

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At the time of writing, US benchmark crude was up 8.5% from last Friday’s low to around $86.3 a barrel, while Brent crude, the international standard, was around 9.5% higher at roughly $94.5 a barrel.

As for European markets, the Euro Stoxx 50 and the broader pan-European Stoxx 600 were trading within a 0.2% range.

The UK’s FTSE 100, Germany’s DAX 30, France’s CAC 40 and Italy’s FTSE MIB were all similarly trading within a 0.3% range.

On Wall Street, US futures were also all trading within a 0.3% range with the tech-heavy Nasdaq leading. The S&P 500 closed marginally lower by 0.2% on Monday at 7109 points.

Despite US representatives, including special envoy Steve Witkoff and senior adviser Jared Kushner, travelling to Islamabad as part of renewed efforts to secure an agreement, no concrete progress on US-Iran negotiations has been announced.

The Strait of Hormuz remains closed and the current ceasefire ends on Wednesday keeping markets in a state of uncertainty.

US President Donald Trump has asserted that the deal currently being negotiated will be better than the Joint Comprehensive Plan of Action (JCPOA), which was signed by US President Barack Obama in 2015 and from which Trump withdrew in 2018.

Latest on US-Iran negotiations

Following the arrival of US representatives to Islamabad there has been no developments on the negotiations with Iran.

Even though US President Donald Trump confidently declared that there is a historic deal in the works, public statements from major Iranian figures seem to indicate otherwise.

Mohammad Ghalibaf, the speaker of Iran’s parliament and the person previously heading the talks with the US, made sweeping declarations via X on Monday stating that the country will “not accept negotiations under the shadow of threats” and “has prepared to reveal new cards on the battlefield”.

Previously, other Iranian representatives have also described US demands as “excessive”.

For the time being, markets eagerly await developments and are highly sensitive to any headlines about the situation.

Associated British Foods and Primark demerger

Although European markets are trading flat, major news in the retail consumer sector has come out of the UK.

Associated British Foods (ABF) is poised to announce the outcome this week of a strategic review into demerging its fast-fashion retail arm Primark, from its diversified food business.

The conglomerate, controlled by the billionaire Weston family, has been working with advisers from Rothschild & Co to assess whether the split would maximise long-term shareholder value.

Analysts argue the move makes sense because of the limited operational synergies between the two divisions: the food arm generates steady cash flows from brands such as Twinings, Patak’s, Jordans cereals and Allied Bakeries, while Primark has pursued aggressive international expansion in a fiercely competitive retail sector.

The decision comes as ABF faces tough trading conditions, with the group warning in January of flat annual sales and declining profits, further pressured by rising costs and the fallout from the Iran conflict, including potential increases in petrochemical prices.

He was asked if now is a good time to open an ISA or not

Martin Lewis has offered some advice on how you could organise your savings. He explained the practical tip amid the current uncertainty surrounding the economic impact of the Iran conflict.

The major war has already triggered a surge in oil prices, with fears of long-term consequences for food production and global economic growth.

Mr Lewis was questioned on his BBC podcast about whether now is an opportune moment to open a stocks and shares ISA, given that markets are struggling. When share prices fall, it can present a prime opportunity to invest, as your funds could increase in value when the market bounces back. But if prices decline further, the worth of your holdings could also drop. In response, Mr Lewis outlined the general principle to bear in mind.

He said: “If you’re talking about investing for a long term money that you don’t need for five years and you’re going to do that in a nice spread of investments, like a global tracker fund or an S&P tracker or FTSE tracker, then you just have to accept that you will never know when the perfect time to put money in is.”

£1,000 savings tactic

Nevertheless, he did reveal one strategy you could use to reduce the risk posed by market volatility. Mr Lewis said: “Let’s just imagine you’re putting £10,000 in a stocks and shares ISA, and you’re putting it away for a long time.

“You could put £10,000 in now but you could arrange with the provider that it sits in its cash part. You can hold it in cash, within a stocks and shares ISA, for the moment.

“You could say I’ve got £10,000, over the next 10 months, I’d like you to buy £1,000 a month of that tracker fund that I’m putting my investment into. It’s called pound-cost averaging.

“Because you’re drip feeding the money in, that helps smooth out the short-term volatility of buying at the right moment. So if you’re worried about that volatility, you might want to adopt that tactic.”

Mr Lewis continued in saying that in reality nobody can predict the optimal time to invest. He said: “They are unknowable in the short term, but in a broad spread of investment over the long term, on the balance of probabilities, investing will outperform saving.

“So don’t let the volatility put you off, but you might want to spread the time that you’re putting the money in.”

Major changes to ISA allowances

Savers may also want to note that major changes to ISA allowances are on the horizon. Currently, you can deposit up to £20,000 each tax year, which can be divided as you wish between cash ISAs and stocks and shares ISAs.

From April 2027, you will only be permitted to save up to £12,000 as you choose. The remaining £8,000 will only be available for deposits into investment-based accounts.

Savers aged 65 and over will be exempt from the new regulations, retaining the existing £20,000 allowance. ISAs are entirely tax-free, with no tax liability on any interest earnings or investment gains within these accounts.

European stocks were mostly steady on Wednesday as investors weighed signals from Washington that a diplomatic breakthrough in the Iran war could be imminent.

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The pan-European Stoxx 600 had ticked down 0.1%, Germany’s Dax edged 0.11% higher and the FTSE 100 climbed 0.11%. The CAC 40 in France fell by a slightly greater margin, at 0.65%.

US President Donald Trump said fresh talks between Washington and Tehran “could be happening over the next two days” in Islamabad, signalling a possible diplomatic breakthrough, and added that the war was “very close to over” — despite continued uncertainty over key sticking points in negotiations.

Asian markets were broadly higher.

Japan’s Nikkei 225 gained 0.5%, South Korea’s Kospi jumped 3.0% and Hong Kong’s Hang Seng edged up 0.7%.

The Shanghai Composite added 0.2%, while Australia’s S&P/ASX 200 was little changed, up less than 0.1%.

On Wall Street, the S&P 500 added 1.2% to its gains from the previous day, and the index at the heart of many 401(k) accounts is now just 0.2% below its record set in January.

The Dow Jones Industrial Average rose 317 points, or 0.7%, while the Nasdaq Composite climbed 2%.

On Wednesday, benchmark US crude inched up by 1 cent to $91.29 a barrel.

Brent crude added 48 cents to $95.27, or less than 1%, after falling 4.6% the previous day. While that is still above its roughly $70 level from before the war began in late February, it remains well below the peak of $119.

Lower oil prices help reduce costs for businesses across the economy. However, some analysts noted that the war is still ongoing, warning that the optimism may prove unfounded.

“The counterintuitive decline in crude appears driven by growing hopes that a second round of peace talks between Washington and Tehran could soon materialise, after the first attempt fizzled out,” said Tim Waterer, chief market analyst at KCM Trade.

“Traders are clearly choosing to price in the possibility of de-escalation rather than the immediate reality of restricted flows,” he added.

Asian nations depend on access to the Strait of Hormuz, a narrow waterway that is the main route for crude oil produced in the Persian Gulf to reach customers worldwide. Disruptions there have kept oil off the global market, driving up prices.

Global inflation this year is expected to accelerate to 4.4% from 4.1% in 2025, according to the International Monetary Fund, which had previously forecast a slowdown to 3.8%.

The IMF also downgraded its forecast for global economic growth to 3.1% this year, from 3.3% projected in January.

Overall, the S&P 500 rose 81.14 points to 6,967.38. The Dow Jones Industrial Average gained 317.74 points to 48,535.99, while the Nasdaq Composite climbed 455.35 points to 23,639.08.

In the bond market, Treasury yields eased as falling oil prices reduced inflationary pressure. The yield on the 10-year Treasury fell to 4.25% from 4.30% late Monday.

In currency trading, the US dollar edged up to 159.03 Japanese yen from 158.79 yen. The euro stood at $1.1780, down from $1.1797.

US stocks climbed to the brink of a record high on Tuesday, while oil prices eased as hopes grew that Washington and Tehran may resume talks to end their war.

The S&P 500 rose 1.2%, leaving it just 0.2% below its January peak. The Dow Jones Industrial Average gained 0.7%, while the Nasdaq Composite jumped 2%, tracking broader global market gains.

Investors are betting that renewed diplomacy could prevent a prolonged surge in oil prices and inflation, allowing focus to return to corporate earnings.

Brent crude for June delivery fell 4.6% to $94.79, down from recent highs, though still above pre-war levels.

However, volatility remains high, with markets sensitive to developments around the Strait of Hormuz, a key route for global oil supply.