signals

Japan’s stock market surges to record high on hopes of an end to US-Israel war on Iran.

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 about 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 $98.47 a barrel as of 01:05 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”.

May 15 (UPI) — President Donald Trump told reporters Friday that the first sentence of Iran’s peace proposal was “unacceptable” and accused the country of backtracking on its nuclear policy, but Iran signaled it’s still ready to negotiate.

Trump said the first sentence was an “unacceptable sentence, because they have fully agreed no nuclear, and if they have any nuclear of any form, I don’t read the rest,” CNN reported he said. He added that he is unsatisfied with the “level of guarantee from them.”

Trump said Iran had agreed to give up its enriched uranium, which he calls “nuclear dust.” But “then they took it back,” he said.

But Iranian Foreign Minister Abbas Araghchi said Friday that discussion about uranium enrichment “is currently not on the agenda of discussions or negotiations,” but the country is willing to talk about it later in negotiations, according to Iran’s news agency Tasnim.

Iran has said it doesn’t plan to build a nuclear weapon but has refused to give up its uranium.

Trump’s comments were on his trip from Beijing after meeting with Chinese President Xi Jinping.

When reporters asked if Xi had agreed to pressure Iran to reopen the Strait of Hormuz, the president replied, “We don’t need favors,” but that “we may have to do a little cleanup work,” without clarifying what he meant.

“We had a little monthlong cease-fire, I guess you’d call it, but we have a blockade that’s so effective, that’s why we did the cease-fire.”

China appears hesitant to get involved in the conflict, Al Jazeera reported.

Trump said the United States and China agree that the strait must be opened and the war must end. About half of China’s crude oil comes through the strait.

Araghchi said Iran would welcome Chinese diplomacy to help defuse the war with the United States.

“Any effort made by the Chinese to support diplomacy will be welcomed by the Islamic Republic of Iran,” he said at a press conference in New Delhi, India. He was attending the BRICS foreign ministers’ meeting.

But he also said that Iran considers itself as the protector of the strait.

Araghchi said on X that with Indian Foreign Minister Subrahmanyam Jaishankar, he “clarified that Iran will always carry out [its] historical duty as protector of security” in the Strait of Hormuz.

He added that “all friendly nations” can “rely on safety of commerce.”

Following his visit with Xi, Trump also said he is considering removing sanctions on Chinese companies that have been buying Iranian oil as the war and high gas prices linger.

“I’m going to make a decision over the next few days. We did talk about that,” Trump said on Friday.

U.S. Energy Secretary Chris Wright told CNBC Friday that China will likely buy more oil from the United States.

“I suspect we’ll see a growth in their oil imports from the United States,” Wright said.

“But ultimately, the world needs to get the Persian Gulf open. Iran’s attempt to hold the whole world hostage, people know it’s temporary.

“One way or the other, we will see an end to the Iranian nuclear program and we will see free flow of traffic through the Strait of Hormuz. That can happen relatively rapidly with an agreement with Iran,” he said.

Iran has said it will only accept a fair and comprehensive agreement in ongoing negotiations with the United States, as talks continue alongside a fragile ceasefire in the Middle East conflict. Foreign Minister Abbas Araqchi made the remarks following discussions with Wang Yi in Beijing.

At the same time, Donald Trump has pointed to what he described as significant progress, announcing a temporary pause in US naval operations linked to the Strait of Hormuz to support negotiations. The strait remains largely restricted, disrupting global oil flows and contributing to an ongoing energy crisis.

What does Iran mean by a comprehensive agreement
The key question is what Iran is asking for. A comprehensive agreement suggests Tehran wants more than a temporary ceasefire. It likely includes guarantees on sovereignty, relief from military pressure, and recognition of its rights under international agreements such as nuclear development for peaceful purposes.

This position indicates Iran is negotiating for long term security and political legitimacy rather than short term concessions.

What is the United States offering in response
The United States appears to be using a mix of pressure and incentives. Military actions and blockades continue, but the pause in naval escort operations signals willingness to de escalate if progress is made.

Statements from US officials show a firm stance on preventing Iran from controlling key shipping routes, while still leaving room for diplomacy. This creates a dual track approach of negotiation backed by force.

Why is the Strait of Hormuz central to the talks
The Strait of Hormuz is critical because it carries a significant share of global oil supply. Its disruption has already triggered sharp movements in energy markets and raised concerns about global economic stability.

Control over this route gives Iran strategic leverage, while reopening it safely is a priority for the United States and global markets. This makes the strait a core bargaining point in negotiations.

Implications for global markets and politics
The negotiations are directly influencing oil prices, currency markets, and investor sentiment. Even signals of progress have led to falling oil prices and improved market confidence.

Politically, the situation affects domestic dynamics in the United States, where rising energy costs are a concern ahead of elections. It also shapes regional power balances across the Middle East.

Analysis what are the possible outcomes
There are three main paths forward. First, a comprehensive agreement could stabilise the region, reopen energy routes, and reduce global economic pressure. Second, prolonged negotiations without resolution could keep markets volatile and maintain the current fragile ceasefire. Third, a breakdown in talks could lead to renewed escalation, further disrupting oil supply and increasing geopolitical risk.

The most realistic short term outcome appears to be continued negotiations with limited de escalation steps. A full agreement will likely require compromises on both security concerns and economic demands.

With information from Reuters.

EXPLAINER

Iran’s president calls the US siege ‘intolerable’ as Donald Trump says war may resume.

Tensions remain high across the region, with Iran, the United States and Israel trading warnings as violence continues.

Iran’s President Masoud Pezeshkian has described the US naval siege of Iranian ports as an “extension of military operations” that is “intolerable”, while US President Donald Trump said Washington “might need” to restart the war, adding that only a handful of people know the details of ongoing talks.

Here is what we know:

In Iran

• Air defences activated in Iran: Air defences were heard in the Iranian capital, Tehran, on Thursday night after being activated to counter small aircraft and drones, Iran’s Tasnim and Fars news agencies reported.
• Iran accustomed to harsher sanctions: Analysts say Tehran entered the blockade prepared, with oil stockpiled at sea, high prices cushioning the impact, and a large domestic market, noting the country is used to “much harsher” conditions after years of pressure.

War diplomacy

• Impasse likely despite pressure tactics: Retired US General Mark Kimmitt said Iran’s strategy of military pressure and economic pain is unlikely to force Washington into talks, warning “the compass needle doesn’t change” and a deadlock could persist, though mounting international pressure would likely push for negotiations and prevent Tehran from asserting control over the Strait of Hormuz.
• US urges meeting of Israel, Lebanon: The US embassy in Lebanon called for a meeting between Lebanese and Israeli leaders as the Lebanese Ministry of Public Health said Israeli strikes on the country’s south killed at least 15 people despite an ongoing ceasefire.
• Trump mulls US troop cuts in Italy, Spain: The US president said he may pull US troops from Italy and Spain due to their opposition to the Iran war, a day after proposing a similar reduction in Germany.

In the Gulf

• UAE urges citizens to leave Iran, Lebanon and Iraq: The United Arab Emirates has banned its citizens from travelling to the three countries and called on those already there to leave immediately and return home, citing regional developments.

In the US

• Trump signals Iran war still possible: The US president said he has not ruled out restarting the war, claiming Iranian leaders “want to make a deal badly”, while touting damage to Iran’s drone and missile capabilities and predicting falling petrol prices once the conflict ends.
• Hegseth on civilian deaths: US Defense Secretary Pete Hegseth told senators the Pentagon has “every resource necessary” to limit harm to civilians, after lawmakers pressed him over a strike early in the war that killed about 170 people at a primary school in Iran.
• He said human oversight remains in place when AI is used in military decisions. The US-based Human Rights Activists in Iran news agency says at least 1,701 civilians have been killed in the war, including 254 children.
• Hostilities ‘terminated’: For War Powers Resolution purposes, US hostilities with Iran that began in February have now “terminated”, a senior official in the US administration said. “Both parties agreed to a two-week ceasefire on Tuesday, April 7, that has since been extended,” the official said. “There has been no exchange of fire between US Armed Forces and Iran since Tuesday, April 7.”

In Israel

• Israel warns Iran: Israel’s defence minister Israel Katz said his country may soon have to “act again” against Iran, to ensure the Islamic republic “does not once again become a threat to Israel”.

In Lebanon

• Deadly Lebanon strike: Israeli strikes on three south Lebanon villages killed nine people, among them two children and five women, according to Lebanon’s Health Ministry, nearly two weeks into a ceasefire between Israel and Hezbollah.
• Two Israeli soldiers wounded in Lebanon: Two Israeli military personnel were injured after an explosive drone detonated in southern Lebanon, according to the army. An officer and a non-commissioned officer sustained moderate wounds and were taken to hospital for treatment, Israeli media reported.

Global economy

• Oil at four-year high: Oil prices soared to four-year highs, with the US crude benchmark Brent for June delivery spiking more than 7 percent to $126.41, while West Texas Intermediate was up 3.4 percent to $110.31, before later paring gains.

Chris Weafer, the CEO of Micro-Advisory Partners, says the UAE’s OPEC exit frees one million barrels of spare capacity. He warns Kazakhstan and Venezuela may follow, leaving OPEC far less influential on global oil pricing.

The Jamieson Greer has told Mexican industry leaders that tariffs imposed by Donald Trump will remain in place, even as negotiations to revise the United States-Mexico-Canada Agreement intensify ahead of a July review deadline.

The remarks, delivered during meetings in Mexico City, signal a major shift from decades of tariff free trade under USMCA and its predecessor NAFTA.

End of Zero Tariff Era

According to multiple sources, Greer made it clear that the United States does not intend to return to a zero tariff framework.

This marks a fundamental change in North American trade policy, where free trade in autos and parts had been the norm for over 30 years. The introduction of tariffs, including a 25 percent duty on automotive imports, has disrupted deeply integrated supply chains across the region.

Impact on Key Industries

The implications for Mexico are significant:

• More than half of Mexico’s auto and steel exports go to the United States
• Vehicle exports have already declined, with job losses in the auto sector
• Steel and aluminum industries face steep duties, some as high as 50 percent

These pressures have weakened Mexico’s competitive position, especially as the United States has negotiated lower tariffs with other partners.

Shifting Trade Rules

U.S. negotiators are also pushing for stricter rules of origin.

Proposals include requiring 100 percent North American sourcing for key components such as engines and electronics, up from current thresholds of around 75 percent. This would force manufacturers to further regionalize supply chains, potentially increasing costs but aligning with Washington’s goal of boosting domestic production.

Mexico’s Position

The Mexican government, led by Claudia Sheinbaum, is seeking relief from tariffs as part of the USMCA review. Officials aim to secure at least partial reductions, particularly in the auto and steel sectors, before finalizing broader trade revisions.

However, the latest signals from Washington suggest that while some easing may be possible, a full rollback is unlikely.

Why It Matters

This development underscores a broader shift in global trade policy away from pure free trade toward managed trade and economic security.

For Mexico, the stakes are high due to its deep economic integration with the United States. Persistent tariffs could reshape manufacturing patterns, investment decisions, and employment across North America.

What’s Next

Formal negotiations are set to begin in late May, with both sides aiming to resolve key disputes before the July deadline.

Key areas of focus will include:

• Tariff levels on autos and metals
• Rules of origin requirements
• Broader economic security cooperation

The outcome will determine the future structure of North American trade.

Analysis

The U.S. position reflects a strategic recalibration rather than a temporary policy shift. By normalizing tariffs, Washington is prioritizing domestic industry and supply chain control over traditional free trade principles.

For Mexico, this creates a structural challenge. Its export driven model, built on open access to the U.S. market, now faces persistent barriers. While some adjustments may preserve competitiveness, the era of frictionless trade appears to be over.

Ultimately, the negotiations will test whether North America can adapt to a new trade paradigm or whether tensions will deepen within one of the world’s most integrated economic regions.

With information from Reuters.

Brent crude rises more than 7 percent as Washington and Tehran offer conflicting accounts on ceasefire negotiations.

Oil prices have risen sharply following attacks on commercial vessels in the Strait of Hormuz and conflicting messages about the prospect of renewed negotiations between the United States and Iran.

Brent crude futures, the primary benchmark for global prices, jumped more than 7 percent in Asia on Monday as the outlook for peace between Washington and Tehran darkened.

Prices eased somewhat later in the morning, with the benchmark at $94.69 a barrel as of 02:05 GMT, up from just under $90.40 on Friday.

The latest price surge came after US President Donald Trump said US forces seized an Iranian-flagged cargo vessel that had attempted to evade the US blockade of Iran’s ports.

Trump’s announcement followed reports by the United Kingdom Maritime Trade Operations (UKMTO) Centre over the weekend that two vessels came under attack while transiting the strait.

Iranian gunboats fired on a tanker, while an “unknown projectile” struck a container ship, according to the UKMTO.

After declaring the strait “completely open” on Friday, Tehran reversed course less than 24 hours later, citing the ongoing US blockade.

Earlier on Sunday, Trump said that a US delegation would travel to Pakistan on Monday to hold a second round of ceasefire talks with Iranian officials.

Iranian state news outlet IRNA later reported that Tehran would not participate in the talks, citing the US blockade and Washington’s “excessive demands” and “unrealistic expectations”.

A two-week ceasefire between Washington and Tehran is set to expire on Wednesday if the sides cannot agree on an extension.

An initial round of talks held in Islamabad earlier this month broke down without any agreement between the sides.

Iran’s effective closure of the strait, which usually carries about one-fifth of global oil and natural gas supplies, has driven a surge in fuel prices worldwide, forcing governments to tap emergency supplies and roll out energy-saving measures.

Nineteen vessels crossed the strait on Saturday, up from 10 the previous day, but far below the historical average of 138 daily transits, according to the UKMTO.

Asia’s main stock markets opened higher on Monday despite the dimming prospects of de-escalation.

Japan’s Nikkei 225 rose more than 1 percent in morning trading, while South Korea’s KOSPI gained about 1.3 percent.

Hong Kong’s Hang Seng Index rose about 0.5 percent, while the SSE Composite Index in Shanghai gained more than 0.4 percent.

Donald Trump has indicated that the conflict with Iran could conclude “soon,” citing progress in negotiations and a possible meeting between the two sides in the coming days. A temporary ceasefire between Israel and Lebanon has added to cautious optimism, though the broader regional situation remains unstable. The war, which began with U.S.-Israeli military action, has had sweeping geopolitical and economic consequences.

Ceasefire in Lebanon:
A 10-day truce between Israel and Lebanon has come into effect, offering a brief pause in cross-border hostilities. However, early reports of violations underline the fragility of the arrangement. Hezbollah, aligned with Iran, has been urged by Washington to maintain restraint during this critical window.

Diplomatic Breakthrough Efforts:
Backchannel diplomacy, with Pakistan playing a mediating role, has reportedly led to progress on key issues. Talks are expected to produce an initial memorandum of understanding, potentially followed by a comprehensive agreement within weeks. Engagement between U.S. and Iranian officials is likely to intensify in the immediate term.

Global Economic Shock:
The conflict has disrupted global energy flows, particularly through the Strait of Hormuz, through which a significant share of the world’s oil supply passes. This has triggered sharp oil price fluctuations and raised concerns about a broader economic slowdown, even as markets show signs of stabilizing on hopes of a resolution.

Nuclear Issue as Core Dispute:
Iran’s nuclear program remains the central obstacle in negotiations. Washington is pushing for long-term restrictions, while Tehran seeks shorter commitments and the lifting of sanctions. Bridging this gap will be critical to securing a durable settlement.

Political Pressures and Regional Stakes:
The war has created domestic political challenges for Trump, particularly ahead of upcoming elections. At the same time, regional actors are closely watching the outcome, as any agreement will shape the balance of power and security dynamics across the Middle East.

Analysis:
Momentum toward a deal is clearly building, but the situation remains precarious. The ceasefire in Lebanon and progress in diplomacy suggest a window of opportunity, yet unresolved issues, especially around nuclear limits and sanctions relief, could still derail negotiations. Trump’s urgency reflects both strategic calculation and domestic political pressure, while Iran appears willing to engage but not at any cost. If a preliminary agreement is reached, it would mark a significant de-escalation, but sustaining peace will require careful management of deep-rooted tensions and competing interests on all sides.

With information from Reuters.

KeyCorp plans to repurchase at least $1.3 billion in shares in 2026, raised from prior guidance of $1.2 billion, and indicated that Basel III revisions could add over 100 basis points to CET1, potentially enabling even more buybacks if market conditions allow.

Norway is preparing to lift restrictions preventing its $2.2 trillion sovereign wealth fund from investing in government bonds issued by Syria.

The move follows the political transition after the ousting of Bashar al-Assad and the rise of Ahmed al-Sharaa, whose government has been seeking economic recovery and international reintegration after more than a decade of war and sanctions.

At the same time, Norway plans to newly restrict investments in bonds issued by Iran, aligning with ongoing international sanctions.

Policy Shift and Financial Context

The Norwegian sovereign wealth fund, the largest in the world, plays a major role in global financial markets. Its investment decisions often influence broader investor behaviour.

The updated policy removes Syria from the exclusion list for government bonds while adding Iran, reflecting changing geopolitical and sanctions dynamics.

Although the fund does not currently hold investments in Middle Eastern government bonds, the policy shift opens the door for future allocations and signals a reassessment of risk and legitimacy.

Geopolitical Significance

Norway’s decision represents a notable step toward Syria’s re-entry into the global financial system. It comes alongside other developments, including the restoration of Syria’s financial links with international institutions after years of isolation.

The move also highlights a divergence in how states are being treated: while Syria is gradually being reintegrated, Iran remains economically isolated due to continued tensions and sanctions.

As one of the world’s most influential sovereign investors, Norway’s stance could encourage other countries and institutions to reconsider their own restrictions on Syria.

Analysis

The decision reflects a broader recalibration of international economic engagement based on political change and shifting strategic priorities. By opening the possibility of investment in Syrian bonds, Norway is signalling cautious confidence in the new government’s direction and stability.

At the same time, the move remains largely symbolic in the short term. The wealth fund has no immediate exposure to Syrian debt, and actual investment will depend on risk assessments, market conditions, and institutional safeguards.

More importantly, the policy underscores how financial tools are increasingly used as instruments of foreign policy. Inclusion or exclusion from global capital markets can legitimise governments, incentivise reforms, or reinforce isolation.

In Syria’s case, gradual financial reintegration could support reconstruction and economic recovery, but it also raises questions about governance, transparency, and long-term stability after years of conflict.

With information from Reuters.