Oil prices climb and stocks fall after Trump says he thinks Iran agreement ‘over’
Shot of oil pumps (Olga Rolenko/Getty Images)
(NEW YORK) — Oil prices climbed and stocks tumbled in early trading on Wednesday after President Donald Trump said he believes an agreement with Iran is “over” amid an exchange of strikes in the Middle East.
Brent crude, the benchmark measure for worldwide oil trading, climbed more than 5% in early trading on Wednesday, pushing the price up to nearly $78 a barrel.
Oil prices stand above pre-war levels, though they have fallen from a high of as much as $118 reached earlier in the conflict.
Stock prices fell in response to the heightened tensions and rising oil prices.
The Dow Jones Industrial Average dropped 600 points, or 1.1%, while the S&P 500 declined 0.6%. The tech-heavy Nasdaq fell 0.4%.
The war prompted the Iranian closure of the Strait of Hormuz, a shipping route that facilitates about one-fifth of worldwide oil supply. In turn, the global economy suffered a historic oil shock, sending oil prices surging.
A U.S.-Iran agreement last month, however, included a provision allowing commercial shipping to resume through the strait, and to do so toll-free for 60 days. Over the ensuing weeks, oil prices prices fell below pre-war levels.
The tensions in recent days rekindled upward pressure on oil prices.
Trump said that negotiations between the U.S. and Iran will continue, but he told reporters of the agreement, “For me, I think it’s over.”
“It’s just a waste of time dealing with them,” Trump said of Iran at a press conference in Ankara, Turkey, where he is attending the NATO summit.
Iran’s military said it launched on Wednesday attacks targeting 85 U.S. military sites in Kuwait and Bahrain, saying they were retaliatory strikes following a wave of U.S. airstrikes on Iranian targets.
U.S. forces hit over 80 targets overnight in a new round of airstrikes that came as an “immediate response” to Iran’s attacks on three commercial vessels transiting the Strait of Hormuz, according to U.S. Central Command.
ABC News’ Joe Simonetti contributed to this report.
A cargo ship remains anchored on May 16, 2026 in the Strait of Hormuz near Larak Island, Iran. (Majid Saeedi/Getty Images)
(NEW YORK) — Global oil prices on Wednesday fell to their lowest level since before the outbreak of the Iran war.
Brent crude futures, the benchmark index for worldwide trading, dropped to $73.50 a barrel. That figure, which amounted to a nearly 5% decline on Wednesday, marked the lowest price since Feb. 27, the day before the Middle East conflict began.
Stock prices, meanwhile, ticked higher Wednesday after a down day Tuesday. The Dow Jones Industrial Average jumped 105 points, or 0.2%, while the S&P 500 increased 0.2%. The tech-heavy Nasdaq rose 0.2%.Gas prices fell below $4 per gallon last week, crossing the milestone as oil costs eased in response to negotiations between the U.S. and Iran to end the war.
The national average price of a gallon of gas stands at $3.92, marking a decline of 58 cents, or 13%, over the past month, AAA data showed. Gas prices, however, remain 94 cents higher than where they stood before the Iran war.
The Middle East conflict prompted the Iranian closure of the Strait of Hormuz, a maritime trading route that facilitates the transport of about one-fifth of the global oil supply. The standoff triggered one of the largest oil shocks ever recorded, sending gasoline prices higher.
Delegations from the United States and Iran arrived over the weekend at the Bürgenstock resort in Switzerland, where they began negotiations aimed at a war-ending deal based on a memorandum of understanding signed last week by both countries.
The memorandum in part called on Iran to allow commercial shipping to resume through the strait, and to do so toll-free for the next 60 days.
In a social media post on Wednesday, President Donald Trump said Iran told him that there would be “no tolls, no insurance costs” and “no other charges of any kind” for ships traveling through the strait.
Claims to the contrary are “troublemaking” false reports, Trump said in the post.
Ships are anchored along the shoreline of the Persian Gulf and Strait of Hormuz, April 22, 2026 in Bandar Abbas, Iran. (Getty Images)
(NEW YORK) — Thousands of canceled flights in Europe over a spike in jet fuel prices. An energy emergency declaration in the Philippines. A two-week school holiday in Pakistan to conserve fuel used by commuters.
The U.S.-Israeli war with Iran triggered dramatic steps in a slew of countries bent on weathering one of the worst oil shocks in history, stoking concern by some about a possible global recession.
Economists disagree about whether the standoff in the Strait of Hormuz will ultimately drive the world’s economy into a downturn, in part because the duration of the waterway’s effective closure remains murky. The outcome holds implications for the livelihoods of billions of people and the performance of companies big and small across the globe.
Some analysts said they fear the oil shortage will soon become so dire that crude prices could rise sharply driving up costs for an array of goods and hammering shoppers. The fallout could squeeze businesses and shrink growth, they said.
Others proved more optimistic, pointing to a smaller rise in oil prices than some feared and a recent track record of economic resilience in the face of trade wars and other turmoil. A worldwide downturn, they said, would require a much more prolonged closure of the strait.
“The longer this drags on, the costlier it becomes,” Ryan Sweet, chief global economist at Oxford Economics, told ABC News.
Still, Sweet added: “Whether or not this will cause a global recession, it’s premature to say.”
The conflict, which began on Feb. 28, prompted Iran’s effective closure of the Strait of Hormuz, a critical waterway that facilitates the transport of about one-fifth of the global supply of oil and natural gas.
The vast majority of oil that passes through the strait is bound for Asian markets. But since oil prices are set on a global market, prices have climbed for just about everyone as buyers chase fewer barrels of crude.
On Tuesday, Trump extended a ceasefire with Iran, averting a resumption of wide hostilities, although the move left the strait under Iran’s effective control. The U.S., meanwhile, has mounted a blockade of Iranian ports in the strait, squeezing a key source of government funds derived from oil exports, while exacerbating the global petroleum shortage.
The Brent futures price, the benchmark index for global oil trading, registered at about $106 a barrel on Friday. That price stood about 50% higher than its pre-war level.
Higher oil and gasoline prices risk a pinch at the pump, as well as additional costs for just about every product delivered across the globe on trucks or ships that run on diesel fuel.
“Oil feeds into inflation, which reduces raw purchasing power — how much bang for their buck people have,” Sweet said. “That slows the economy.”
Still, oil prices remain below the highs reached after some previous economic shocks. In 2022, the price of Brent crude surged above $139 per barrel in March, just weeks after the Russian invasion of Ukraine. During the 2008 financial crisis, U.S. gasoline prices shot up as high as $147 a barrel.
Some economic forecasts issued in recent weeks projected that global economic growth could escape the crisis relatively unscathed, as long as the war reaches a resolution in short order and oil prices avoid a steeper climb.
The Organisation for Economic Co-operation and Development (OECD) last month predicted that global gross domestic product (GDP) growth would “remain broadly stable” at 2.9% in 2026. That forecast matched projections issued by the OECD in December, before the war.
The OECD touted strong tech investment and lower-than-expected tariffs, citing “carry-over from robust outcomes in 2025.”
Earlier this month, the International Monetary Fund (IMF) projected that GDP growth would register at a solid pace of 3.1% in 2026, noting that the global economy had withstood “higher trade barriers and elevated uncertainty last year.”
The forecasts from the OECD and IMF worked under the assumption of a resolution to the conflict by the middle of this year, acknowledging the impact could worsen if it stretches on for longer.
Some economists, by contrast, consider the economic threat a more urgent risk.
Paul Krugman, an economics professor at the City University of New York Graduate Center and a former columnist at the New York Times, criticized the IMF projection on Substack on Monday, faulting the group for “seriously underestimating how badly the global economy could be hit.”
“In my view, a full-on global recession is more likely than not if the Strait remains closed for, say, another three months, which seems all too possible,” he said.
Rosier forecasts fail to adequately factor in the risk of a significant rise in oil prices over the near term, Krugman said, warning of widespread “demand destruction” as oil becomes increasingly scarce. Under such a scenario, a surge in oil prices would make it unaffordable for many buyers, forcing them to find alternatives or forgo energy use altogether.
Technical definitions vary about what constitutes a global recession, but the gist is a period of sluggish or negative economic growth. For the World Bank, a global recession amounts to a contraction in global per capita GDP; while the IMF considers GDP growth below 2% sufficient to warrant the label of a recession.
A six-month impasse in the strait could push global oil prices as high as $190 in August, Oxford Economics said in a blog post last month. That price shock would send global inflation to 7.7%, near its peak in 2022, the independent economic advisory firm said.
“But unlike 2022, when the global economy kept growing through the price shock, the severity of this disruption tips the world into outright contraction,” Oxford Economics added.
In addition to its optimistic baseline projection, the IMF issued a downbeat prediction in the event of a more severe disruption of oil markets that stretches into next year. Under those circumstances, the global economy “would come close to experiencing a recession,” the IMF said, noting that it defines a global recession as annual GDP growth below 2%.
Growth below 2% has happened four times since 1980, the group said.
Across the board, economists acknowledged a high degree of uncertainty as the Iran war unfolds. Plus, some said, the negative effects will be unevenly distributed, hitting harder in low-income countries as well as those who depend on oil that passes through the strait.
While the full extent of economic wreckage remains unknown, the prospect of an extended global impact is all but certain, Sweet said.
“This will take a long time to get back up to resembling anything close to normal,” he added.
David Zaslav, CEO & President, Warner Bros. Discovery at TCL Chinese Theatre on April 07, 2026 in Hollywood, California. (Monica Schipper/Getty Images)
(NEW YORK) — Warner Bros. Discovery shareholders on Thursday voted to approve the Paramount Skydance takeover bid, completing a major step toward the $111 billion media mega-deal.
The offer from Paramount encompasses the HBO Max streaming service, the Warner Bros. film production company, and cable channels such as CNN. Assets owned by Paramount include CBS, Paramount Pictures and Comedy Central, among others.
Shareholders cast ballots “overwhelmingly” in support of the Paramount takeover, Warner Bros. Discovery said in a statement.
“Today’s stockholder approval is another key milestone toward completing this historic transaction that will deliver exceptional value to our stockholders. We will continue to work with Paramount to complete the remaining steps in this process that will create a leading, next-generation media and entertainment company,” Warner Bros. Discovery CEO David Zaslav said in the statement.
Shares of Paramount fell nearly 5% in the minutes following the announcement on Thursday morning.
In December, Paramount launched a hostile takeover bid to acquire Warner Bros. Discovery, just days after Netflix struck a deal to purchase a large part of the media giant.
The rival, multi-billion-dollar efforts to acquire streaming platform Warner Bros. Discovery threatened to upend the media industry and shape content viewed by hundreds of millions of people.
Paramount appeared to gain the upper hand in the bidding war in recent months. In February, the Warner Bros. Discovery board of directors voted unanimously to recommend approval of the Paramount takeover.
Under the terms of the deal, shareholders will receive $31 per share, which amounts to a 147% premium, Warner Bros. Discovery said in March.
