Oil prices fall while stock markets rose after Donald Trump said the war with Iran would end and that the Strait of Hormuz would be “open to all” if Tehran reached a deal with the United States.

“Assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end, and the highly effective Blockade will allow the Hormuz Strait to be OPEN TO ALL, including Iran,” Trump said.

He added that if Iran failed to reach a deal, “the bombing starts” and it would be “sadly, at a much higher level and intensity than it was before.”

The comments followed his announcement that he would briefly pause the “Project Freedom” operation, which escorts vessels through the Strait of Hormuz.

The waterway, which carries about a fifth of global oil supplies, has been blocked by Iran since late February, contributing to a global energy crisis.

Trump said the pause was temporary to allow time to finalise a deal with Tehran, but stressed that the blockade of Iranian ports would continue.

The news sent Brent crude oil tumbling 11 per cent to as low as $97 (£71) a barrel, after having surged as much as 6% earlier in the week following fresh attacks in the Middle East. It marked the first time Brent crude had fallen below $100 since 22 April.

Crude prices were already trending lower on Wednesday morning, and the decline accelerated after Axios reported that the White House believed it was close to agreeing a one-page memorandum of understanding with Iran to end the war.

The report, citing four sources including two US officials, said both sides were preparing to establish a framework for more detailed nuclear negotiations.

However, oil later recovered some ground, paring losses to trade down 7.3 per cent at $101.83 a barrel, after Iran dismissed the report as an “American wishlist [and] not a reality.”