Welcome back to the City AM liveblog. The peace relief rally across markets ground to a halt yesterday as investors were rocked by new tensions in the Middle East that threatened all-out war re-emerging between the US and Iran. Negotiations were handed a blow as Donald Trump’s envoys Steve Witkoff
Samuel Norman
Thursday 02 July 2026 6:33 am | Updated: Thursday 02 July 2026 6:34 am
Welcome back to the City AM liveblog.
The peace relief rally across markets ground to a halt yesterday as investors were rocked by new tensions in the Middle East that threatened all-out war re-emerging between the US and Iran.
Negotiations were handed a blow as Donald Trump’s envoys Steve Witkoff and Jared Kushner arrived in Qatar on Tuesday to meet mediators, but no direct talks went on to take place. Iran claimed there had been no plan for talks.
The Wall Street Journal reported that Trump had been briefed on proposals to return to war, but opted to continue on the path pursuing peace for now.
It follows both sides having exchanged fire since the end of last week, stemming from an Iranian drone attack on a cargo ship travelling through the Strait of Hormuz. The US hit back with retaliatory strikes on “military surveillance infrastructure, communications systems, air defence sites, drone storage facilities and minelayer capabilities”.
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Tensions have remained heightened around the Strait of Hormuz, with Iran refusing to give up control of the narrow waterway.
“Hormuz is defined under Iran’s command, not Centcom. A military summit in Bahrain cannot establish legal order and security for the Persian Gulf,” Iran’s deputy foreign minister Kazem Gharibabadi said.
Despite this, some uptick in traffic flowing through the strait has led to oil falling to its lowest level since late February.
Brent crude – the international benchmark for oil prices – tumbled to $71 per barrel on Thursday morning, with the US claiming crude flows through the strait had exceeded 10m barrels per day with the support of American military.
Oil exports from the UAE have also returned to pre-war levels with the help of workarounds.
We’ll be bringing you the latest market updates and analysis.
Here’s a few of our top headlines this morning Read more As it happened: Stocks mixed as Trump warns takes ‘two to tango’ on Iran peace
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