Oil prices rose sharply again Thursday and stock markets fell as President Donald Trump left the task of reopening the Strait of Hormuz to a group of U.S. allies.
Officials from more than 40 countries in Europe, Asia and the Middle East convened by videoconference Thursday to discuss how to clear the strait, a vital corridor for the world’s oil supply that has been choked off by the U.S.-Israeli war with Iran. The United States was not expected to join the meeting, which Britain organized.
In his address to the nation on Wednesday night, Trump presented no plan to reopen the strait, suggesting it was not the United States’ problem. The president, who has railed against NATO allies for hesitating to get more involved in the war, said it was up to other countries to “take the lead in protecting the oil that they so desperately depend on.”
Trump also defended the increasingly unpopular war, while saying the military campaign in the Middle East was “nearing completion.”
Still, Trump’s comments rattled financial markets, sending the price of Brent crude, the global benchmark, up 8 percent to about $109 per barrel on Thursday morning. U.S. stock markets opened lower, with the S&P 500 index losing around 1.5 percent, the Nasdaq composite index sinking around 2 percent and the Dow Jones Industrial Average more than 1 percent lower. In Europe, gas prices rose, while stock markets generally traded around 1 percent lower.
Asian markets also closed lower Thursday, with stocks in South Korea and Japan more than 4 percent and 2 percent lower, respectively. Markets in Taiwan and Hong Kong fell by about 1 percent.
Since the U.S. and Israel launched an aerial barrage against Iran over a month ago, Tehran’s threats and counterattacks have largely halted traffic in the Strait of Hormuz, which connects the Persian Gulf to the open ocean, sending energy prices soaring.
In his speech, Trump said countries that “refuse to get involved in the decapitation of Iran” should “build up some delayed courage” and help secure the waterway. “Go to the strait and just take it, protect it, use it for yourselves,” he added. “The hard part is done, so it should be easy.”
British Prime Minister Keir Starmer, however, cautioned earlier in a speech: “I do have to level with people on this; this will not be easy.” Starmer said the nations meeting Thursday would “assess all viable diplomatic and political measures we can take” and work to restore traffic once the fighting has stopped.
The dispute with Washington has widened cracks in the NATO alliance: Trump has chided Europeans for not offering unflinching support for the war or joining it more directly by deploying ships to the strait.
The Thursday meeting follows mounting pressure from the Trump administration, which has suggested the U.S. could pull support for NATO and for Ukraine in its war against Russia if European leaders do not acquiesce to Trump’s demands. The president said this week that he was considering withdrawing from the U.S.-led alliance, which has been a cornerstone of American foreign and military policy in Europe for about eight decades.
Responding to questions about Trump’s threats, French President Emmanuel Macron warned Thursday that they weaken the alliance. “If we cast doubt on the commitment every day, we strip it of substance,” he said.
The French leader criticized Trump’s flip-flopping remarks about the war. “I think the world needs stability. … This isn’t a show. We are talking about war, about the lives of women and men, about the risks to our countries,” Macron said. “When we are serious, we don’t say every day the opposite of what we said the day before.”
Macron also dismissed the idea of a military operation to force open the Strait of Hormuz, calling instead for a ceasefire and a “clear framework” to resume the flow of oil through the narrow waterway.
“We consider it unrealistic,” Macron told reporters during a trip to South Korea. “It would take indefinite time and would expose all those who go through the strait to risks.”
During Thursday’s videoconference, British Foreign Secretary Yvette Cooper accused Iran of trying to “hijack an international shipping route” and hit “global economic security.” She said maritime traffic through the strait had shrunk from about 150 vessels per day to five, with some 20,000 seafarers trapped on about 2,000 ships.
The call included officials from France, Germany, Italy, the United Arab Emirates, Australia, Canada and Japan. Cooper said that they had agreed to ramp up pressure on Tehran, including through the United Nations, to allow all ships through and that they would explore “economic and political measures” targeting Iran, such as more sanctions.
Iranian officials have said the Strait of Hormuz is closed to “enemies of the nation.”
France, Britain and other countries have said their navies would help secure the waterway and escort tankers once the fighting abates, but not while missiles and drones are flying. Several of Washington’s traditional allies, such as Britain and Germany, also have allowed the U.S. to use their airspace and military bases for the war.
Col. Guillaume Vernet, a spokesman for the French military, said Thursday that talks would also begin on what military assets could be deployed to the strait.
“We will need to assemble a sufficient number of vessels and have coordination capabilities in the air, at sea, as well as the ability to share intelligence,” Vernet said at a news conference. He said coordination with Iran eventually also would be necessary to ensure security guarantees for ships, which seems unlikely for now.
European leaders are scrambling to limit the fallout of a U.S. war that is roiling the Middle East, and buffeting households and businesses across Europe and Asia, in many ways more so than in the United States.
But as they try to calm tensions with the U.S., their most powerful ally, European leaders are also maneuvering to avoid joining a war that is deeply unpopular at home and that could make them a target of Iranian retaliation.
European officials have, in recent days, deliberated with partners in the Persian Gulf and Asia on forming a coalition that could secure and monitor the passage of oil tankers through the strait.
France’s military chief convened officials from more than 30 nations last week to strategize, and his country, a member of the U.N. Security Council, is also taking part in diplomatic efforts at the U.N. Even if there is a de-escalation between the U.S., Israel and Iran, securing the waterway will require naval assets for demining and deterrence, officials say.
Nations along the Persian Gulf, where Iran has directed many of its missile and drone attacks, also are pushing to reopen the strait as the conflict triggers some of their worst economic turbulence in decades.
In parallel with talks on building a coalition, some Gulf states have backed an effort for a Security Council resolution that could provide legal cover for an international operation to unblock the strait.
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