And US markets fall as investors ponder how long the war in Iran may last.
Mōrena and welcome to Thursday's edition of Morning Brew, bringing you all the major business and political headlines you need to know this morning from around the world.
First up, the International Energy Agency has approved its largest-ever release of emergency oil reserves in a bid to contain energy prices following the Iran war.
The IEA, which has 32 members and an emergency stockpile of more than 1.2 billion barrels of oil, agreed to release 400 million barrels overnight NZT. Brent crude prices briefly dipped following the news before settling at about US$91 a barrel, with markets questioning the pace at which the release will happen.
The move comes as Iran continued strikes against Israel and the UAE and the US and Israel continued to hit targets in the Islamic Republic, Bloomberg reported. Three ships have also been hit in the Strait of Hormuz and Persian Gulf.
“The oil market challenges we are facing are unprecedented in scale, therefore I am very glad that IEA member countries have responded with an emergency collective action of unprecedented size,” IEA executive director Fatih Birol said in a statement. “Oil markets are global, so the response to major disruptions needs to be global, too.”
Oil prices had earlier fallen sharply after a post on US Secretary of Energy Chris Wright's social media account wrongly stated the US Navy had escorted a tanker through the Strait of Hormuz, CNBC reported.
US inflation, meanwhile, slowed in February, with the consumer price index, excluding food and energy, up just 0.2% from January. It was unchanged at 2.5% from a year earlier, which was the slowest pace in nearly five years, Bloomberg reported.
Lower prices for used cars and vehicle insurance helped keep inflation in check, despite higher costs for gasoline and groceries. US inflation has generally been on a downward trend, although the war with Iran has reignited inflation concerns.
The US Federal Reserve meets next week and is widely expected to leave interest rates unchanged, although some investors are now seeing a chance that rates will need to be held for longer on the back of the war. Previously, traders had seen the Fed cutting rates in the second half of this year.
The Dow Jones Industrial Average was down 1.1% at 5.30am NZT, the S&P 500 fell 0.5%, and the Nasdaq Composite had dropped 0.3%.
Oracle shares were up 9% after its third-quarter earnings and revenue exceeded analysts' expectations, but markets remain uncertain about how long the war in Iran may continue. US President Donald Trump earlier this week claimed the war would end "very soon".
“Trump suggesting the war may be ending soon, post an extraordinary surge in oil volatility, may imply his ‘pain threshold’ has been reached, in our view,” Barclays head of European equity strategy Emmanuel Cau said, CNBC reported. “The longer the oil spike persists, the higher the downside risk to earnings and valuations.”
To the UK now, where fintech Revolut has finally acquired a full UK banking licence after a years-long process. The company was valued at US$75 billion ($127b) last year, making it one of Europe's most valuable private tech companies.
The licence means the company, which also operates in New Zealand, will be able to start offering new products, including lending. It had previously been granted a licence with restrictions in mid-2024.
The company claims to have 70 million customers and has also applied for a US banking licence.
“Launching our UK bank has been a long-term strategic priority for Revolut, and marks a significant moment in our journey,” Revolut co-founder and chief executive Nik Storonsky said. “This is a vital step in our mission to build the world’s first truly global bank.”
Finally today, the BBC reports that UK Prime Minister Keir Starmer was advised that Peter Mandelson's appointment as British ambassador to the US posed a "general reputational risk" because of his relationship with convicted sex offender Jeffrey Epstein.
A set of documents relating to his appointment also says Mandelson asked for a payout of ₤547,000 after he was sacked last year. He ended up receiving ₤75,000.
Starmer's national security adviser, Jonathan Powell, said the documents showed Mandelson's appointment was "weirdly rushed", while Cabinet Office minister Darren Jones said Mandelson "should never have been appointed" and a due diligence report did not "expose the depth and extent" of Mandelson's relationship with Epstein.
However, the BBC reports that the tranche of documents does not include evidence Mandelson had lied about the extent of his relationship with Epstein, as Starmer had claimed earlier this year. Some documents have not been released due to an ongoing police investigation.
Sign up to get the latest stories and insights delivered to your inbox – free, every day.
