The Galle lighthouse in Sri Lanka. The island country has ordered street lights, neon signs and billboard lighting to be switched off to curb energy use.

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Oil prices climbed on Tuesday as traders turned cautious over the prospect of a negotiated agreement between the United States and Iran to end the Middle East war, while European and US stocks fell.

European and US stock markets had rallied on Monday after US President Donald Trump delayed strikes on Iranian energy sites and hailed “very good” talks with Iran. Asian equities caught up with the strong gains on Tuesday, but the rally fizzled in European trading.

Iran has denied Trump’s claims of advanced peace talks, and the price of Brent – which had slumped on Monday – rose back above $100 a barrel on Tuesday.

A much higher volume than normal of oil contracts traded 15 minutes before Trump pledged to halt strikes on Iranian energy infrastructure, sending prices tumbling, financial media reported.

Traders who bet on prices falling ahead of the announcement would likely have profited from Trump’s sudden reversal, prompting analysts to question whether some market participants had acted on prior information.

Philippines declare ‘energy emergency’

Philippine President Ferdinand Marcos declared a state of “national energy emergency” on Tuesday, citing risks to the domestic fuel supply and energy stability.

The state of emergency was declared just hours after the country’s energy secretary said the Philippines planned to boost the output of its coal-fired power plants to keep electricity costs down as the war wreaks havoc with gas shipments.

The order authorises the country’s energy department to make advance payments of 15% to secure fuel contracts while taking direct action against hoarding or profiteering.

Sri Lanka switches off lights

Sri Lanka ordered street lights, neon signs and billboard lighting to be switched off from Tuesday as part of measures to cut energy consumption by 25% to tackle supply shortages.

Government spokesperson Nalinda Jayatissa said all state institutions had been asked to reduce the use of air conditioning.

Sri Lanka has already raised fuel prices by a third, and last week, President Anura Kumara Dissanayake urged electric car owners to avoid overnight charging, saying the resulting demand surge had forced the country to burn more coal and diesel to maintain the grid.

Eurozone activity slows due to war

Business activity in the eurozone has slowed in March as the US-Israel war on Iran drove energy prices higher and disrupted global supply chains, according to a closely watched survey.

The HCOB Flash Eurozone purchasing managers’ index (PMI), published by S&P Global on Tuesday, fell to 50.5 from 51.9 in February. A reading above 50 indicates growth, while a figure below 50 shows contraction.

“The flash Eurozone PMI is ringing stagflation alarm bells as the war in the Middle East drives prices sharply higher while stifling growth,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

Bangladesh hikes jet fuel again

Bangladesh hiked jet fuel prices by 79% on Tuesday as costs surge in the wake of the war.

The Bangladesh Energy Regulatory Commission order, the second this month, means aviation fuel prices have leapt by 111% since the start of the war, with the price now set at $1.32 a litre.

Drone attacks disrupt Amazon’s cloud in Bahrain

Amazon’s cloud arm told AFP on Tuesday that its service in Bahrain had been disrupted after drone attacks hit the region.

An Amazon Web Services spokesperson said the disruption was ongoing, without specifying the exact location affected or any potential damage done.

AFP journalists in Bahrain said the government’s portal for online procedures was inaccessible, as were several other services.

Flights grounded

Vietnam’s national air carrier will suspend nearly two dozen domestic flights a week starting next month because of limited fuel supplies caused by the war, the nation’s aviation authority said.

Major domestic routes and international flights are being maintained, though Vietnamese airlines are working on adding fuel surcharges on international routes.

German aviation giant Lufthansa – which operates Eurowings, Austrian, Swiss and Brussels Airlines and has acquired a stake in Italy’s ITA – said all services across the Middle East were cancelled until the end of April due to the “volatile situation”.

AirFrance and its budget airline Transavia also extended flight suspensions to destinations across the region.

Hong Kong carrier Cathay Pacific said it has extended its flight suspensions to and from Dubai and Riyadh to 31 May as a result of the war.