Donald Trump says he has postponed threatened strikes on Iranian power plants after US and Iran have held talks on the “complete and total resolution of hostilities” in the Middle East.
On Saturday night, Trump gave Iran a 48-hour deadline to reopen the Strait of Hormuz – or, he said, the US would “obliterate” Iranian power plants, “starting with the biggest one first”
Trump’s message is perhaps his most conciliatory since the war began, but it leaves significant unanswered questions.
The UK government has welcomed President Trump’s latest announcement.
“Any reports of productive talks are welcome,” Keir Starmer’s official spokesperson has said.
No 10 has “always said that a swift resolution to the war is in global interests”, the spokesperson says, before adding “the Strait of Hormuz specifically needs to be reopened”.
Earlier, the UK’s Keir Starmer and Trump agreed that reopening the Strait of Hormuz is “essential to resume global shipping” during a call late on Sunday
The call – which came on the day Trump shared a satirical clip about the PM – lasted 20 minutes and was “constructive”, Downing Street says.
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Meanwhile, the Israel Defense Forces says it expects to face “several more weeks of fighting” against Iran and Hezbollah.
Iran’s Fars News Agency, which is affiliated with Iran’s Islamic Revolutionary Guard Corps, has quoted an unnamed Iranian source as saying there is “no direct or indirect contact with Trump”.
The source says after “hearing that our targets would include all power stations in West Asia, he backed down”.
In the half hour after President Trump posted about the constructive conversations with Iran, there were remarkable changes in markets.
Broadly put, energy prices tumbled in expectation of a more normal supply of oil and gas. The Brent crude oil price fell 12% to below $100 (£75) a barrel.
Stock markets: Turned around on expectations of a pathway to end the war, with US markets predicted to open up 2-3%.
The markets for government debt, the bond markets, or for the UK the gilt markets, saw extraordinary falls in the effective interest rate.
These yields had spiked very high this morning in anticipation of a prolonged conflict with a permanent impact on supply, igniting a wave of inflation and an energy shock.
In the UK: The markets were pricing in a remarkable four rate rises this year at one point. Much of that reversed in anticipation equally remarkable half hour with the 10 year yield falling 0.4 percentage points to 4.78%.
To be clear, all these markets are still in worse shape versus where they were before the conflict.
Even if everything ended this week there are still scars to the supply of gas, for example, with the damage done to key facilities in Qatar.
BBC
