Main developments
Brent crude climbed above $115 a barrel early on Tuesday before paring its gains to trade 0.2 per cent higher for the day at $113.
Authorities in Dubai said they had extinguished a fire on a Kuwaiti oil tanker in the emirate’s waters that was targeted by a drone.
Asian markets extended their losses, led by South Korea’s Kospi with a 3.1 per cent decline.
A broker for Pete Hegseth, the US defence secretary, attempted to make a big investment in major defence companies in the weeks leading up to the US-Israeli attack on Iran, the FT reported.
Donald Trump on Monday hailed “great progress” in talks with a “new and more reasonable regime” in Iran about ending the conflict.
But he also warned the US would launch a large attack on Iran’s infrastructure, including its oil and desalination plants, if “a deal is not shortly reached”.
Korea proposes supplementary budget
South Korea has proposed a Won26.2tn (US$17.3bn) additional budget to cushion its economy from the Iran war shock. This will be the second such extra budget in President Lee Jae Myung’s 10 months in office.
The package will focus on energy relief and stabilisation, with Won10.1tn allocated to offset surging fuel costs, including compensating refiners for losses from a nationwide price cap.
Spending will go towards consumer vouchers, vulnerable households and young people, and support for companies, particularly exporters and petrochemical businesses.
Won25.2tn of the outlay will be funded by windfall tax revenues from an AI-led memory chip boom. Seoul still expects its fiscal deficit to narrow to 3.8 per cent of GDP this year, down from 4.2 per cent last year.
Oil pares gains and Asian stocks fall
Asian stock markets fell and oil retreated following a report from The Wall Street Journal that Trump told aides he was willing to end the war without reopening the Strait of Hormuz.
Prices for Brent were up slightly for the day by 0.2 per cent at $113 a barrel after trading as high as $115.60.
In China the CSI 300 and Hang Seng index fell 0.6 per cent and 0.4 per cent, respectively. Japan’s Topix slipped 0.7 per cent and South Korea’s Kospi dropped 3.1 per cent.