Oil prices dive as IEA eyes emergency release with Hormuz Strait in focus

The drop in oil prices gathered pace as member states of the International Energy Agency met for crisis talks to assess "the current security of supply" and the potential release of emergency stocks.

In a statement following a Paris meeting of G7 energy ministers, IEA executive director Fatih Birol said he was "in close contact" with energy ministers from key energy producers and consumers regarding the situation.

Oil prices slid to session lows near 1730 GMT after US Energy Secretary Chris Wright said the US Navy had escorted a tanker through the Strait of Hormuz, but Wright quickly deleted the post and Trump administration officials said no such expedition had taken place.

The Paris and London stock markets gained over 1.5 percent after European gas prices sank 15 percent, helping ease concerns over a renewed surge of global inflation. 

Frankfurt ended the day up 2.4 percent. 

Asian stock markets rallied, with Seoul up more than five percent and Tokyo ending with a gain of 2.9 percent. 

"Renewed optimism on the back of falling oil prices helped global stock indices recover, most strongly in Asia and Europe," said analyst Axel Rudolph at IG trading platform.

Wall Street stocks also spent much of the session in positive territory but lost ground after Wright deleted his social media post, which raised hopes that the Strait of Hormuz was back open for activity.

A DOE spokesperson said Wright's post was taken down because it was "incorrectly captioned" by agency staff.

Trump's energy team "are closely monitoring the situation, speaking with industry leaders, and having the US military draw up additional options to keep the Strait of Hormuz open, including the potential for our Navy to escort tankers," a DOE spokesperson told AFP.

The broad-based S&P 500 finished down 0.2 percent.

Jack Ablin of Cresset Capital Management said oil remains at the top of investor concerns.

"It's sort of the lifeblood of the global economy," Ablin said. "Anything that could potentially disrupt that is of concern to investors worldwide."

Investors were also digesting Trump's remarks Monday that the campaign was far ahead of his initial timeline of around a month. 

"It's going to be ended soon, and if it starts up again they'll be hit even harder," Trump told a news conference in Florida on Monday.

Iran has responded by vowing to block Gulf oil exports and asserting that it, not the US, would "determine the end of the war".

Trump warned Iran against mining the Strait of Hormuz, through which nearly 20 percent of the world's crude oil usually transits from the Gulf to world markets.

"If for any reason mines were placed, and they are not removed forthwith, the Military consequences to Iran will be at a level never seen before," Trump said Tuesday in a social media post.

- Key figures at around 2215 GMT -

Brent North Sea Crude: DOWN 11.3 percent at $87.80 per barrel

West Texas Intermediate: DOWN 11.9 percent at $83.45 per barrel

New York - Dow: DOWN 0.1 percent at 47,706.51 (close)

New York - S&P 500: DOWN 0.2 percent at 6,781.48 (close)

New York - Nasdaq Composite: FLAT at 22,697.10 (close)

London - FTSE 100: UP 1.6 percent at 10,412.24 (close) 

Paris - CAC 40: UP 1.8 percent at 8,057.36 (close)

Frankfurt - DAX: UP 2.4 percent at 23,968.63 (close)

Seoul - Kospi: UP 5.4 percent at 5,532.59 (close)

Tokyo - Nikkei 225: UP 2.9 percent at 54,248.39 (close)

Hong Kong - Hang Seng Index: UP 2.2 percent at 25,959.90 (close)

Shanghai - Composite: UP 0.7 percent at 4,123.14 (close)

Euro/dollar: DOWN at $1.1612 from $1.1636 on Monday

Pound/dollar: DOWN at $1.3415 from $1.3437

Dollar/yen: UP at 158.06 yen from 157.67 yen

Euro/pound: DOWN at 86.48 pence from 86.58 pence

burs-jmb/jgc