Meanwhile, France’s finance minister said Monday the G7 was “not there yet” in terms of any release of strategic reserves as members held crisis talks on the economic fallout of the Middle East war.
“Despite the apparent calm, the bigger question for markets is whether energy flows in the region can return to normal,” wrote Fawad Razaqzada at Forex.com.
“The Strait of Hormuz remains the critical focal point. As one of the world’s most important oil shipping routes, any disruption to traffic through the strait would immediately reignite supply fears and likely send crude prices sharply higher again.
“Until traders see clear confirmation that shipping routes are secure and production across the region is stabilising, oil prices are unlikely to retreat significantly further from current levels.”
A US Department of Energy spokesperson told AFP officials “are closely monitoring the situation, speaking with industry leaders, and having the US military draw up additional options to keep the Strait of Hormuz open, including the potential for our Navy to escort tankers”.
Iran has responded to the strikes by vowing to block Gulf oil exports and asserting that it, not the US, would “determine the end of the war”.
Trump warned Tehran against mining the waterway, through which nearly 20 per cent of the world’s crude oil usually transits from the Gulf to world markets.
“If for any reason mines were placed, and they are not removed forthwith, the Military consequences to Iran will be at a level never seen before,” he said Tuesday in a social media post.
National Australia Bank’s Skye Masters raised questions about Trump’s claims that the war would be over soon.
“Guidance out of Israel and the US is showing a divergence around the endgame, with President Trump having suggested the end is insight while Israeli Prime Minister (Benjamin) Netanyahu’s comments suggest he is not ready to de-escalate,” she said.
Read the full article here
