Key events
FTSE 100 opens higher
Stocks have opened higher in London, where the FTSE 100 index is up 24 points or 0.23% at 10,427 points.
Technical products and services firm Diploma (+17%) are soaring, after lifting its financial guidance for this year due to resilient aerospace demand and continued growth in its North American seals business.
Copper producer Antofagasta (+2.6%), and engineering firm Weir Group (+2.4%) are following, while airlines are benefitting from the drop in oil prices today.
Switzerland cuts 2026 growth forecast due to Middle East war
Switzerland has lowered its forecast for growth this year, due to the Middle East conflict.
The Federal Government Expert Group on Business Cycles (the official body which assesses the Swiss economy) has trimmed its forecast for growth in 2026 to 1.0%, down from 1.1% predicted last December.
It declared (pdf) that “the war in the Middle East is driving up energy prices and further increasing uncertainty”, adding:
The war in the Middle East has led to a sharp rise in international energy prices since the end of February. This is dampening the international economic outlook and is expected to result in higher inflation rates, including in European and Asian trading partner countries.
here is a great deal of uncertainty regarding the further development of the conflict in the Middle East and its economic impact. Against this backdrop, the Expert Group is raising its technical assumption for average oil prices in the current and coming year.
Iraq at risk of downgrade as Hormuz shutdown hurts oil output
Last night, Iraq was put on risk of a credit rating downgrade by S&P, due to the drop in its oil output this month.
S&P put Iraq on CreditWatch with negative implications, which could lead to a downgrade.
S&P said:
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Iraq’s oil production has fallen to around 1.2 million barrels a day (bpd), from 4.2 million bpd, due to the effective closure of the Strait of Hormuz since the regional conflict started on Feb. 28, 2026.
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A prolonged disruption to Iraq’s oil production will pressure the country’s fiscal and external position over 2026, even with sizable international reserves, which currently cover about 10 months of current account receipts.
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We have therefore placed our ‘B-’ long-term foreign and local currency sovereign ratings on Iraq on CreditWatch with negative implications.
The Iraqi state news agency is reporting that Kirkuk has resumed pumping oil via Turkey’s Ceyhan port at a rate of 250,000 barrels.
That would only be a fraction of the country’s normal output. Before the Iranian war began, Iraq was producing 4.5 million barrels of crude oil per day. But it was forced to slash output once tankers couldn’t travel safely through the strait of Hormuz.
introduction: Oil falls after Iraq signs deal to resume exports via Turkey
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The conflict in the Middle East continues to grip the markets, as ship traffic through the strait of Hormuz continues to be slowed by the crisis.
But this morning, oil has dropped after Iraq reportedly struck a deal with Turkey to resume oil exports through their territory, having agreed with Kurdistan to pump oil through a pipeline in its region.
According to Reuters, crude exports from Iraq’s Kirkuk fields by pipeline to Turkey’s Ceyhan port have resumed, giving an alternative route rather than braving the strait.
But, the rerouting of some Iraqi oil through Turkey will only partially relieve supply concerns, Bloomberg reports, adding that Iraq’s oil production has fallen to about 1.4 million barrels a day — about a third of levels before the closure of Hormuz.
Brent crude is down 1.55% this morning at $101.80 a barrel, while US crude is almost 3% lower at $93.42 a barrel.
Ipek Ozkardeskaya, senior analyst at Swissquote, says:
This morning, oil is sharply down on news that Iraq signed a deal to resume oil exports via Turkey, bypassing the Strait of Hormuz, while Saudi Arabia is also rerouting exports toward the Red Sea. The region is reorganizing, preparing for the possibility of a prolonged conflict.
Restoring oil exports fully will take time, and we may soon see physical-market shortages — likely keeping oil prices under upward pressure. Yet, as flows adapt to alternative routes, the initial surge in oil prices seen at the start of the war could ease.
Stock markets are responding to this too – Japan’s Nikkei has gained 2.8% this morning, while South Korea’s KOSPI has jumped by 5.7%.
Investors are also hoping that central bankers will ‘look through’ the approaching spike in inflation, rather than reacting by raising interest rates. We’ll hear from America’s top central banker, Jerome Powell, tonight, when the Federal Reserve is widely expected to leave US interest rates on hold.
Jim Reid of Deutsche Bank reports:
There is also a bit more calm in markets at the moment and a small hint that there is a decoupling from the price of oil as the last 24 hours have seen more positive risk markets and lower [bond] yields.
The agenda
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10am GMT: Eurozone inflation report for February
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12.30pm GMT: US producer prices inflation (PPI) report for February
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1.45pm GMT: Bank of Canada interest rate decision
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6pm GMT: US Federal Reserve interest rate decision
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6.30pm GMT: Federal Reserve press conference
