Portugal Colonial - Oil rises, stocks fall ahead of Trump's Iran deadline

"The market remains on tenterhooks as ceasefire hopes flagged and Trump threatened to destroy Iran's infrastructure," said Joe Mazzola, an analyst at Charles Schwab.

The US crude benchmark, West Texas Intermediate for delivery in May, jumped almost four percent to over $116.50 a barrel, while Brent North Sea crude, for delivery in June, gained almost one percent to just under $111 a barrel.

The three main US stock indexes were all lower in mid-morning trading, while Paris, London and Frankfurt all closed around one percent lower. The dollar was little changed against most of its peers.

"The conflict in the Middle East is one long deadline after another and there is a constant stream of promises to end the war coming out of the White House," said Kathleen Brooks, research director at XTB.

"Ultimately no one knows what the president will do next, and this is causing tensions to remain high in financial markets," she said.

Trump has warned Tehran that unless it allows free passage through the strait by midnight GMT, the United States will unleash what he called the "complete demolition" of Iran's critical infrastructure.

He doubled down on that Tuesday, warning that "a whole civilization will die" if Iran does not accept US demands, though he added that he "hopes" that does not happen.

"The market has some hope that it won't come to that either, yet that is running in tandem with a fear that it just might," said Patrick J. O'Hare, an analyst at Briefing.com.

"Today is a hand-wringing day if there ever was one," he added.

Iran has effectively blocked the waterway since the start of the war on February 28, driving up global oil and gas prices, as around one‑fifth of the world's oil normally flows through the strait.

Tehran showed no sign of backing down, with its Revolutionary Guard warning that it will destroy energy installations across the Gulf if US attacks cross its "red lines".

The hit to fuel supplies from the Middle East has forced governments around the world to unveil economic support measures amid fears of another spike in inflation.

On Tuesday, the Philippines said inflation jumped to a forecast-topping 4.1 percent in March, the highest level in nearly two years.

Away from the war, shares in Samsung Electronics rallied around one percent after the technology giant estimated that first-quarter profit soared 755 percent to an all-time high of $38 billion on strong sales of chips crucial for artificial intelligence.

- Key figures at around 1540 GMT -

West Texas Intermediate: UP 3.3 percent at $116.13 a barrel

Brent North Sea Crude: UP 0.7 percent at $110.48 a barrel

New York - Dow: DOWN 0.8 percent at 46,290.69 points

New York - S&P 500: DOWN 0.9 percent at 6,553.80

New York - Nasdaq Composite: DOWN 1.2 percent at 21,725.05

London - FTSE 100: DOWN 0.8 percent at 10,348.79 (close)

Paris - CAC 40: DOWN 0.7 percent at 7,908.74 (close)

Frankfurt - DAX: DOWN 1.1 percent at 22,921.59 (close)

Tokyo - Nikkei 225: FLAT at 53,429.56 (close)

Shanghai - Composite: UP 0.3 percent at 3,890.16 (close)

Hong Kong - Hang Seng Index: Closed for holiday

Euro/dollar: UP at $1.1577 from $1.1543 on Monday

Pound/dollar: UP at $1.3251 from $1.3236

Dollar/yen: UP at 159.90 yen from 159.68 yen

Euro/pound: UP at 87.36 pence from 87.27 pence

burs-bcp/gv/ach

M.Gameiro--PC